Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

ALLIANCE AND LEICESTER (GIROBANK) BILL

Read the Third time, and passed.

MIDLAND METRO BILL [Lords]

Read a Second time, and committed.

CITY OF BRISTOL (PORTISHEAD DOCKS) BILL [Lords] (By Order)

Order for Third Reading read.

Queen's Consent, on behalf of the Crown, signified.

To be read the Third time tomorrow.

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Kosovo

Mr. Waterson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy towards Kosovo.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): The special group on Kosovo within the international conference on the former Yugoslavia is working intensively with both Serbian and Kosovar representatives. We strongly support its efforts. We believe that the Serbian authorities should grant the Kosovars autonomy with full civil rights, and that the Kosovars should accept that.

Mr. Waterson: Does my right hon. and learned Friend accept that Kosovo could be the next victim of Serb expansionism? What other measures does he think could be taken, as a matter of urgency, to reduce tension in the area and to protect the 90 per cent. of ethnic Albanians in Kosovo who are being oppressed and denied their civil liberties?

Mr. Hogg: My hon. Friend has made an important point. The issue of the Kosovars was addressed directly by the London conference, and it is now being discussed by the working group in Geneva. It has also been the subject of talks in Kosovo itself. As my hon. Friend may know, there is now a Conference on Security and Co-operation in Europe team in Kosovo, whose primary function is to try to defuse tension. We shall explore other possibilities in our attempts to reduce the risk of violence breaking out.

Mr. Wareing: Will the Minister give an assurance, on behalf of Her Majesty's Government, that on no account

will the Government permit the export of arms and military equipment to Albania—equipment that could be used to create a conflagration in Kosovo, thus giving support to the extreme nationalists on both sides of the divide in that troubled province?

Mr. Hogg: We would be very disturbed if we saw any evidence that the Albanian Government were seeking in any way to foment trouble in Kosovo. That would be a very serious development.

Mr. Cormack: Does my right hon. and learned Friend accept that the way in which the vast majority of the population in Kosovo are treated is utterly inexcusable and unacceptable? Does he further accept that many of us feel that, if the west had taken rather firmer and more united action last year, the tragedy of Bosnia could perhaps have been prevented? We now face possible tragedies not only in Kosovo, but in Macedonia. Will my right hon. and learned Friend assure me that Her Majesty's Government are well aware of that?

Mr. Hogg: Repressive action by the Serbian forces in Kosovo would indeed be a serious escalation of what is already a very grave situation—not least because of the risk that such action could pose to adjoining states. That fact would certainly be in the minds of Security Council members if they had to determine what might be the appropriate response to an outbreak of violence It n Kosovo.

Sir Russell Johnston: At the end of his answer to the original question, the Minister said that the people in Kosovo must accept Serbian rule, given certain conditions on human rights. That, surely, is an indefensible position. If 90 per cent. of the population in a defined area want to assert self-determination, that is their right, and that is what we have signed up to in the United Nations. Will the Minister change his view?

Mr. Hogg: That is not what we signed up to in the United Nations; nor is it a correct summary of what we signed up to in the CSCE. There is a serious problem: whether or not one is prepared to unstitch frontiers that have already been agreed and that have been in existence for a very long time. If we embarked on that policy, we would create many greater difficulties in central and eastern Europe more generally. We believe that the proper way to address the position of the Kosovars is by way of autonomy. That is what we are working towards.

Lady Olga Maitland: Does my right hon. and learned Friend agree that the only way to guarantee true peace to the people of Kosovo is to ensure that there are genuinely free and fair elections in Belgrade on 20 December? In that way, Mr. Milosevic could be toppled in his endeavours to carry on with his oppression. Will my right hon. and learned Friend therefore consider giving wholehearted support to Mr. Panic?

Mr. Hogg: I certainly agree that it is important that there should be fair and free elections on 20 December in Serbia, but one should not assume that such elections would not be won by Mr. Milosevic. He might well win them.

Mr. George Robertson: The Minister was careful not to answer the question about the sale to Albania of arms which might be used in Kosovo. Could he possibly give a


straight answer now to what was a straight question? Did not the British ambassador to Albania send back a message and make it public that he believed that the situation in Kosovo was extremely dangerous? Today, the Financial Timessays that the Minister of State
has not yet instilled into those working under him a strong sense of urgency.
What can the right hon. and learned Gentleman say to reassure the House that Kosovo will not be the next Bosnia?

Mr. Hogg: I have made it plain, in answer to a variety of questions, that we attach great importance to trying to defuse the tension in Kosovo. If there were to be an outbreak of violence, it could involve a number of adjoining states. That is why we placed such a high priority on that subject at the London conference, why we are so firmly behind the talks now going on in Geneva and why we welcome the deployment of the CSCE team in Kosovo. We most certainly will seek to explore other ways of reducing the risk of an outbreak of violence in Kosovo.

Cuba

Mr. Ernie Ross: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on United Kingdom relations with Cuba.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): We maintain normal diplomatic and trade relations with Cuba.

Mr. Ross: Following yesterday's decision by the General Assembly that it did not accept the extension of extra-territorial jurisdiction by the United States and given that there have been 30 years of stick for Cuba, is it not time that the Government and our European partners began to extend a little carrot? For example, should they not support the decision of the national assembly in Cuba to hold, for the first time in 30 years, direct and secret elections for the municipalities and the national assembly? Is it not time that the Minister overcame his personal aggro against Cuba and got down to normalising relations with that country?

Mr. Garel-Jones: We are strongly opposed to the extra-territorial provisions in the Cuban Democracy Act. In company with the majority of our European partners, we abstained in the vote on the Cuban resolution. The hon. Gentleman must not be deceived, in his enthusiasm for supporting Fidel Castro, by the recent electoral reforms regarding multiple-candidate elections to the national assembly. They are purely cosmetic. President Castro has made it clear that there will be no change to the one-party system in Cuba. I do admire the hon. Gentleman—even the Soviet Union has now abandoned Fidel Castro's regime, yet he remains constant to it.

Bosnia

Mr. Mullin: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his EC colleagues regarding the situation in Bosnia; and if he will make a statement.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): The situation in Bosnia has been discussed at every recent meeting of European

Community Foreign Ministers, most recently in Brussels on 9 November and with Western European Union partners in Rome on 20 November.

Mr. Mullin: No one would wish to pretend that the situation in Bosnia is simple; far from it. Although we are arming dictatorships as far apart as Indonesia and Saudi Arabia—we were secretly training terrorists in Cambodia until the autumn of 1989—is there nothing that we can do to help the people of Bosnia to resist the ethnic cleansers?

Mr. Hurd: Not by relaxing the arms embargo; but of course we must help. There are four things that we should do. One is to keep up the pressures to end the war, and the hon. Gentleman will have seen the increase in sanctions and last week's Adriatic stop-and-search resolution. Another is to get the humanitarian help through, including food and medicines, which is what the Cheshires are doing. We can also provide that help; the United Kingdom's assistance to the former Yugoslavia is £79 million to date. We must also create the basis for a political settlement, which is what Lord Owen and Cyrus Vance are doing all the time on our behalf. Those are the four main pressures that we must continue to apply.

Mr. Colvin: Will my right hon. Friend ensure that, in his discussions with our EC partners, he has their agreement that, in seeking a solution to the problem in Bosnia, partitioning of that country is completely ruled out, as that would only marginalise the Muslim population and could lead to a holy war, which would drag in other countries?

Mr. Hurd: It is, I hope, clearly understood that our European partners, the United States and the United Nations will not accept the partitioning of Bosnia-Herzegovina between Serbia and Croatia.

Mr. Macdonald: Does the Foreign Secretary recall the Minister of State, the right hon. and learned Member for Grantham (Mr. Hogg), telling the House on 16 November that the Government had no evidence of any breaches of the air exclusion zone over Bosnia? Has the Foreign Secretary seen the report in The Times yesterday where Mr. Cedric Thornberry, the deputy head of the United Nations protection force, says that there have been more than 100 breaches of the exclusion zone in the past month? Were the Government aware of those breaches? Now that they are aware of them, will they return to the Security Council and get effective action to stop them?

Mr. Hurd: My right hon. and learned Friend and the hon. Gentleman are talking about two separate things. My right hon. and learned Friend was talking about attack missions—the use of planes based on airfields for attack. The hon. Gentleman is talking about a different category. If there are Serb air attacks from those fields, the hon. Gentleman is right—we will have to go back to the Security Council for further measures.

Mr. Churchill: Is it not unprecedented that the victims of aggression—the Bosnian Muslims—should be subjected to a United Nations arms embargo? Is it not the inevitable consequence of that policy that they will relentlessly be driven out of the positions that they hold and their positions will be overrun, adding to the number of refugees on the move in Europe which has been unprecedented since the second world war?

Mr. Hurd: The arms embargo applies to all parties. If the embargo is relaxed for one party, in practice it will have to be relaxed for all. I do not believe that that would be a step forward in the search for either peace or justice in the former Yugoslavia.

Dr. John Cunningham: As the whole case of the European Community and the United Nations in seeking a solution to the tragedy in Bosnia is based on the peace process and is buttressed by mandatory arms embargos and economic sanctions against Serbia, will the right hon. Gentleman assure the House that none of our European Community partners is breaching that embargo? Why are at least some of our European partners breaking the economic sanctions and turning a blind eye to the embargo? Will the right hon. Gentleman assure the House that he will take urgent steps to stop the breaches?
Finally, in connection with the tragedy in the former Yugoslavia, is it not ominous that on three occasions this afternoon the Minister of State, the right hon. and learned Member for Grantham (Mr. Hogg), refused to rule out the sale of arms to Albania?

Mr. Hurd: I agree with the hon. Gentleman's first point. Where there is evidence that either part of the mandatory embargo—the supply of arms to any of the parties, or trade in embargoed items to Serbia and Montenegro—has been broken, that evidence must be followed through, whoever pointed the finger, and those breaches must be stopped. I shall not add to what my right hon. and learned Friend said about the supply of arms.

Mr. Marlow: Can we be a little less diplomatic and a little more blunt? Is not the reality that the Serbs are swimming in the arms of the Yugoslav army? They have the arms and they are the aggressors. The Bosnians are the victims and they have no arms. If there were any justice in this world, we would offer our support to the victims and allow them to defend themselves with arms, rather than sustaining the aggressors. Have we in this country lost our courage?

Mr. Hurd: That is not what would happen. The whole country of Bosnia-Herzegovina is awash with arms. The arms are in the hands of central commands and warlords throughout the country and the various denominations who are not under any control. We would not do any service to the people of Bosnia-Herzegovina, whatever their origins, if we increased the supply of arms into that chaotic country. That is the view of all our partners in the European Community and of the United States.

Russia

Mr. Elletson: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he had with President Yeltsin, during his recent visit to the United Kingdom, about the changes in Russian foreign policy which were announced in his speech to the Collegium of the Russian Foreign Ministry on 27 October; and if he will make a statement.

Mr. Douglas Hogg: My right hon. Friend the Prime Minister discussed a wide range of current international questions with President Yeltsin on 9 November. Various foreign policy issues were also discussed during my meeting with the Russian Foreign Minister on 10 November.

Mr. Elletson: Will my right hon. and learned Friend make it clear to the Russian Government that any toughening of Russian foreign policy in the Baltic states, such as was envisaged in President Yeltsin's speech to the Collegium of the Russian Foreign Ministry, will be viewed with grave concern by Her Majesty's Government? Will he also assure the House that the Government will continue to press the Russian Government for the complete withdrawal of Russian troops from the Baltic states as quickly as possible?

Mr. Hogg: I always pay considerable attention to what my hon. Friend says about Russia. He is one of the few Members of Parliament who speaks Russian and has a long-standing knowledge of that country. The answer to his question is yes. We attach great importance to the early withdrawal of Russian troops from the Baltic states. That matter was raised on several occasions by my right hon. Friend the Prime Minister and others. We shall continue to press the Russian Government on that point. Their response is that they intend to withdraw and the process of withdrawal has only been suspended.

Mr. Winnick: Is there common agreement between Russia and the United Kingdom on combating racism and fascism in Europe? When the Minister meets hi; colleagues, including the Russian Foreign Minister, will there be an opportunity to demonstrate our horror at what happened in Germany at the weekend? A 51-year-old woman, a 10-year-old child and a 15-year-old child were burned to death for no other reason than that they happened to be Turkish. Is it not necessary for us to demonstrate once again that fascism and racism must be fought from the start, or we shall pay the penalty, as we have done recently?

Mr. Hogg: The events to which the hon. Gentleman refers were indeed dreadful. That fact is fully appreciated by the German Government, who condemned the events as strongly as the hon. Gentleman does. Fighting facism and racism are major priorities of any civilised Government, including the Russian Government. Those principles are clearly enshrined in the CSCE agreements to which the Russian Government and, I am glad to say, the British Government fully subscribed.

Mr. Anthony Coombs: Does my right hon. and learned Friend agree that one of the most potentially destabilising regimes in the middle east is Iran, which is building up its military arsenal, especially with submarines, which come primarily from Russia? Does he agree that Boris Yeltsin must take every possible action to ensure that that flow of arms is stopped, so that what is already a hotbed in the region is not further destabilised?

Mr. Hogg: My hon. Friend makes an important point. There is no doubt that the Government of Iran have ambitions to become the dominant power in the Gulf region. It is also certain that they are in the process of acquiring arms to foster that strategic objective. My hon. Friend referred to the sale of Russian submarines. My right hon. Friend the Prime Minister explicitly raised that question with the Russian President, Mr. Yeltsin.

Iraq (Exports)

Mr. Dalyell: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the dates of each meeting held by the former Minister of State, Foreign and Commonwealth Office, the right hon. Member for Bristol, West (Mr. Waldegrave), with private sector companies concerning exports to Iraq, during his tenure of office.

Mr. Hurd: So far as I am aware, the only official meeting that my right hon. Friend held with a private company about exports to Iraq was a presentation by British Aerospace on 8 June 1989 at the Ministry of Defence on a proposal for the sale of Hawk to Iraq. Permission for the sale was later refused.

Mr. Dalyell: Is it not clear from the interdepartmental committee meeting of 1 November 1989 between the right hon. Member for Bristol, West, Alan Clark and Lord Trefgarne that, although the right hon. Gentleman tried to impose the condition that he did not want to have to answer awkward questions in Parliament, he was absolutely immersed in the problems of Matrix Churchill? In view of what he knew, how can it have been proper to allow the prosecution of three directors whom the right hon. Gentleman and many other people in the Government must have known had acted in concert with Government opinions and policy? How could those directors have been allowed to get very near to gaol?

Mr. Hurd: Those matters were fully discussed in the House on Monday, and everything that the hon. Gentleman has said falls within the scope of Lord Justice Scott's inquiry. That is the right place to carry those points further.

Miss Emma Nicholson: I have seen many Russian armaments in southern Iraq and, given the potential for conflict in Iraq, does my right hon. Friend agree that the European Community would be best placed to make early decisions on peacekeeping missions to Iraq and other areas of the world once the Maastricht treaty has been accepted?

Mr. Hurd: We shall certainly be better able to act together in the areas—this may be one—in which we all have a common purpose and can agree on a common way of achieving it. For exercises such as those to which my hon. Friend referred to have any validity, they would also need the support of the Security Council. Meanwhile, there is a crisis in southern Iraq, to which my hon. Friend has often drawn attention, which requires the kind of effort which we have been able to mount so far.

Dr. John Cunningham: Everyone knows that, as Secretary of State for Foreign and Commonwealth Affairs, the right hon. Gentleman had overall responsibility for the arms sales guidelines. We know that when those guidelines were fundamentally and importantly changed, he did not inform the House of Commons. Did he tell the Prime Minister of that important and fundamental change?

Mr. Hurd: The guidelines were not changed. My right hon. Friend the President of the Board of Trade took the House through the sequence of events—the meeting in July 1990 and the fact that the decision was never implemented.

Mr. Dalyell: On a point of order, Madam Speaker. In view of the unsatisfactory cop-out of the Foreign Secretary's reply, I hope to raise the matter on the Adjournment of the House.

Middle East Peace Talks

Mr. Hicks: To ask the Secretary of State for Foreign and Commonwealth Affairs what initiatives he has taken to assist the middle east peace talks; and if he will make a statement.

Mr. Day: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current status of the middle east peace process.

Mr. Carrington: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress towards peace in the middle east.

Mr. Hurd: The seventh round of bilateral negotiations between Israeli and Arab delegations ended in Washington on the 20 of November. The negotiations tackled substance. All sides are, in our view, seriously engaged. Our objective has been, and remains, to support the process. We have had detailed meetings with all the parties and have played an active role, through teams at each of the bilateral rounds and in all the multilateral working groups.

Mr. Hicks: As the incoming United States Administration will understandably require time in order to formulate their position and policy, does that not make it all the more incumbent on European Community nations to ensure the momentum of the talks, not least to safeguard the requirements and position of the Palestinians?

Mr. Hurd: Certainly, we must try to ensure that the impetus of the talks is maintained even through the change in the United States Administration. The Israelis and Palestinians are now talking substance together and that is a huge advance. It is difficult for the Palestinians; they are being asked to discuss proposals for an interim self-governing authority. We hope that they will do that and that the discussions will succeed.

Mr. Day: Can my right hon. Friend confirm that it remains British policy to seek an end to the Arab boycott? Will he impart that information to Mr. Rabin when he makes his very welcome visit to this country? When will my right hon. Friend be able to report to the House about the response from the Arab states to British overtures on that point? If no progress has been made, will he be willing to raise the matter at European level?

Mr. Hurd: We look forward to Mr. Rabin's visit which will be an important and welcome occasion. We are in action with our EC partners in Arab capitals to secure an end to the boycott. We think that that is justified, partly in response to the action of the Israeli Government in suspending settlements. That action has been only partial and it would be very helpful if they could completely suspend settlement activities, including those in eastern Jerusalem.

Mr. Carrington: Does my right hon. Friend agree that the President of the United States plays a vital role in


brokering an agreement between the Israelis and the Palestinians? Will my right hon. Friend have urgent discussions with President-elect Clinton's transitional team to ensure that it is aware of the vital importance of obtaining a just settlement for the Palestinians without which no lasting peace is possible in the middle east?

Mr. Hurd: Yes. We will increasingly be in touch with Governor Clinton's transitional team and we will certainly want to discuss the need to keep up the impetus in the peace process and continue what President Bush and Secretary Baker have done in trying to strike, when preparing the meetings, a reasonable balance between the requirements of Israel, the Palestinians and other Arabs.

Mr. Janner: May I thank the right hon. Gentleman for what he has said about the Arab boycott? He is certainly right. Will he tell us what steps he has taken to achieve an end to the boycott and what results he has obtained?

Mr. Hurd: We have pointed out to our Arab friends that we believe that the time has come to end the boycott and we await their reply.

Mr. Skinner: Why should anyone in the middle east believe a word that the Foreign Secretary says when the guidelines regarding the Matrix Churchill affair were changed and when, in the House today, both the Foreign Secretary and his junior Minister refused to answer questions about whether they will sell arms to Albania? If he will not come clean on that and uses the weasel words, why should anyone in the middle east believe him?

Mr. Hurd: We have dealt with arms for Albania to the extent that they are relevant. The other matter is a matter for Lord Justice Scott.

Mr. Ernie Ross: Before the debate on the Arab boycott gets out of hand, will the Secretary of State remind the House that there is an absolute difference between international law which says that the settlements on the west bank are illegal, as are deportations, and relations between countries no matter where they are? The two things are not exactly the same.

Mr. Hurd: I am sorry, but I do not follow the hon. Gentleman. Either I am particularly slow, or the hon. Gentleman is not as lucid as he usually is.
We believe that the settlements are illegal—we have said that—and that, quite apart from their legality or illegality, they have clearly proved over the years to be one of the main obstacles to the peace process.

Mr. Batiste: Has my right hon. Friend discussed with our partners in the European Community his initiative to end the Arab boycott? Does he have their unanimous support in seeking that objective as well?

Mr. Hurd: The answer to both parts of that question is yes.

Gibraltar

Dr. Marek: To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy on deciding which elements of EC legislation applicable to Gibraltar are internal matters for the Gibraltarian Government.

Mr. Garel-Jones: The United Kingdom is responsible before the European Court of Justice for Gibraltar's

compliance with EC law. In practice, the bulk of EC legislation is implemented by local legislation in Gibraltar after consultations between Her Majesty's Government and the Government of Gibraltar.

Dr. Marek: Does the Minister accept that the Gibraltar Constitution Order 1969 led Gibraltar and a lot of us to believe that more self-government in respect of defined domestic matters would be given to the people of Gibraltar over the course of time and that it would be wholly wrong if such matters were prevented from being decided)n Gibraltar simply because of Gibraltar's membership of the European Community as a colony of the United Kingdom?

Mr. Garel-Jones: The hon. Gentleman makes a very fair point, but he will be aware that the 1969 constitution pre-dates not only the accession of the United Kingdom and, through it, Gibraltar into the European Community but the accession of Spain into the European Community. It is for that reason that the Chief Minister agrees that the present situation is unsatisfactory. We are having fruitful discussions with him to see how we can define those matters in a way that gives Gibraltar the widest autonomy possible consistent with meeting the EC obligations for which we are responsible before the European Court of Justice.

Mr. Dickens: Does my right hon. Friend agree that these are complex issues because of the EC status of Gibraltar and the United Kingdom constitution, and that those items will have to be discussed with very great care, step by step on their own merits?

Mr. Garel-Jones: Yes. I agree with my hon. Friend. The cornerstone of our discussions with the Chief Minister must be that Gibraltar's membership of the European Community, to which the Gibraltar Government and the Gibraltar people are very strongly attached, cannot be called into question.

Mr. Beggs: Has the Secretary of State considered whether, under EC legislation, internal legislation in Gibraltar or United Kingdom legislation, the circumstances of the collapse of International Investments Ltd. (Gibraltar) can be investigated, bearing in mind the fact that the vast majority of those who were defrauded were British citizens? Will he undertake to ensure that they ultimately achieve justice?

Mr. Garel-Jones: I can give the hon. Gentleman the undertaking that the standards of financial propriety in Gibraltar are of the very highest. Indeed, the discussions that we are now having with the Chief Minister are to ensure that Gibraltar is able to implement the necessary standards of control of those matters that the single market will demand. I know that that is the intention of the Gibraltar Government and of Her Majesty's Government. I am sure that the protections that flow from that for investors will be properly seen to by the Government of Gibraltar.

Mr. Adley: Does my right hon. Friend accept that—I have not precisely checked the mathematics—the total electorate of Gibraltar is rather fewer than the number of people in my constituency who voted for me? There are more than 80 million people in Britain and Spain, many of whose interests, together with those in the rest of Europe, are often obstructed by the Gibraltar Government's


dogmatic views on issues such as the airport. Will my right hon. Friend please bear it in mind that the people of Europe in general and the people of Britain and Spain in particular also have an interest in the matter?

Mr. Garel-Jones: I do not accept my hon. Friend's point. The position of Gibraltar inside the Community, as I have said, pre-dates Spanish entry. We have suffered in recent months, through the external frontiers convention, from an inability of Spain to accept that fact. It is fact which we are determined to uphold.

Public Immunity Certificates

Mr. Bill Michie: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's signing of public immunity certificates.

Mr. Hurd: As my right hon. and learned Friend the Attorney-General has made clear, public interest immunity must be claimed for departmental papers if they fall within a recognised class or contain material which it would in principle be contrary to the public interest to disclose. A Minister will only sign a certificate after he has personally considered whether papers fall within the claim. It is for the court to determine whether the claim is valid and, if so, to balance the public interest in confidentiality against the interest of justice in the particular case.

Mr. Michie: In this intriguing "Who dun it?"—the inquiry taking place which has fairly serious consequences —does it not seem strange that the signing of the immunity certificates was left to what one could describe as a junior Minister, and that they were not signed by the Secretary of State or the Minister of State? We have to assume that either the Secretary of State and his side-kick were not very au fait with what was happening, that they did not want to know about it, or that they wanted a scapegoat if something went wrong. Those certificates were signed and could have sent innocent people to prison.

Mr. Hurd: What the hon. Gentleman might assume is that I was abroad at the relevant time.

Mr. Allason: Will my right hon. Friend tell the House how many times he has signed public interest immunity certificates in criminal and civil cases and how many have been overturned, as in the example of Mr. Justice Smedley?

Mr. Hurd: Not without notice. I signed some as Home Secretary and some in my present position. I signed one relevant to my hon. Friend about which he has written to me over the years and I have explained to him that the basis on which I signed it, as Home Secretary, was similar to, and after taking similar advice, the action taken by my right hon. Friends in the present case.

Mr. Trimble: The Foreign Secretary is in danger of misleading the House by his reply to the hon. Member for Sheffield, Heeley (Mr. Michie) that Ministers must sign certificates. The Foreign Secretary is not an automaton and is under no obligation to sign automatically a certificate the minute that someone tells him that it comes within an area that might be covered by public interest immunity. Surely, he has to exercise his judgment as to whether he should claim public interest immunity in the circumstances of each case. There is a particular obligation

on him to exercise his discretion when the people involved are in danger of being sent to prison for carrying out the Government's wishes.

Mr. Hurd: That is not the position as explained by the Attorney-General. Of course, Ministers have to read personally and carefully the papers involved in the proposal that they should sign a certificate. They do so in order that they can certify whether, in their judgment, the papers fall within a recognised class or contain material which it would be contrary to the public interest to disclose.

Council of Europe

Mr. David Atkinson: To ask the Secretary of State for Foreign and Commonwealth Affairs what he hopes to achieve during his period as chairman in office of the Committee of Ministers of the Council of Europe.

Mr. Garel-Jones: The House will know that the United Kingdom assumed the chairmanship of the Committee of Ministers of the Council of Europe following the ministerial meeting on 5 November in Strasbourg. During the six months of our chairmanship, we intend to give priority to the programmes for assistance to the new democracies of eastern Europe, and to the reform of the human rights machinery. We shall also encourage an objective look at the operation of the Council, in terms of its internal structures, its relationships with other organisations and its management procedures.

Mr. Atkinson: I hope that my right hon. Friend and his colleagues will find that new role less onerous than the presidency of the European Community has proved to be. Does my hon. Friend agree that it is nonsense to establish a new pan-European institution with a parliamentary assembly as part of the process of the Conference on Security and Co-operation in Europe, when the Council of Europe already has proven experience and is an almost identical body? Will he use his period as chairman in office to seek to convince his non-European counterparts the United States and Canada—of the common sense of the Council of Europe being the parliamentary assembly of the CSCE?

Mr. Garel-Jones: I appreciate the point that my hon. Friend has made. It certainly is the case that the Council of Europe is already helping the CSCE on the human dimension and with its own technical expertise. However, the remit of the Council of Europe goes much wider than that of the CSCE and my hon. Friend will be aware that the memberships of the two are not wholly compatible. Although I have great sympathy with my hon. Friend's point about the proliferation of international organisations, I am not sure that his suggestion is ripe for taking forward at this stage.

Mr. Hardy: Will the Minister give particular encouragement and assistance to the new member states and guest member states during the next six months to see whether we can secure implementation of some of the more important Council of Europe conventions? During that time will he also seek to ensure that those states give proper respect and support to the Vance-Owen initiatives, including those member states through which arms are still flowing today?

Mr. Garel-Jones: Yes. I can give the hon. Gentleman the undertakings that he seeks.

Mr. John Marshall: My right hon. Friend referred to the problems faced by the countries of eastern Europe. Does he agree that unless we indulge in much more liberal trading practices with the former dictatorships of eastern Europe, then, following the elections in Lithuania and Romania, there is a real risk that they will return to communism?

Mr. Garel-Jones: I agree with my hon. Friend, but he will be aware that we deal with that matter through the association agreements of the European Community. In a sense those agreements were invented by Britain, and through those agreements we press strongly for the most liberal treatment possible in trade with the new eastern European democracies.

Sir Russell Johnston: Given the importance that the Minister rightly attributes to the Council of Europe and the fact that its plenary sessions are known one year in advance—as indeed are those of the Western European Union assembly—does he agree that it is insulting to our partners and inconvenient for hon. Members to arrange European debates in the House during those plenary sessions?

Mr. Garel-Jones: I accept the hon. Gentleman's point, but the way in which the House chooses to run its business is a matter for the House. I know that a report has been produced by the Procedure Committee and all Members should look at it on a non-party basis.

Southern Africa

Mr. Hutton: To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to visit southern Africa to assess the political situation in the region.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): My right hon. and noble Friend the Minister for Overseas Development may visit the region early next year.

Mr. Hutton: Does the Minister agree that the present situation in Angola is a cause of genuine concern and has the potential to destabilise all southern Africa? Can the Minister tell the House what steps he intends to take to ensure that UNITA not only accepts the result of the September general election, but abides by the terms of the peace agreement?

Mr. Lennox-Boyd: As the hon. Gentleman may be aware, two days ago Mr. Savimbi said that the country must move forward on the basis of the election. That represents some progress. The hon. Gentleman is right to draw attention to the grave difficulties in that country. The important thing is to encourage both sides to refrain from violence and to continue to implement the peace agreement embodied in the earlier agreements.
The United Nations Angola verification mission has had its mandate in that country extended until 30 November and it is important to note that the United Nations Secretary-General will again put proposals before the Security Council to carry forward the peace process in Angola before 30 November.

Sir George Gardiner: When our right hon. and noble Friend next visits southern Africa does she have in mind a visit to Mozambique? In the meantime, would my hon. Friend care to comment on the progress made by the two sides, the Government of Mozambique and Renamo, in moving towards the goal set in the accords that they signed in Rome? Furthermore, will the British Government do their utmost to help both sides achieve a reconciliation that is in accordance with democratic principle?

Mr. Lennox-Boyd: Yes, Madam Speaker. The United Kingdom fully supports the general peace agreement that was signed on 4 October in Rome. We will be playing an active part in the process in future months because we will have representation on the peace process commissions established to monitor the implementation of the agreement.

Mr. Robert Hughes: As a partner in the United Nations brokering of the election agreement in Angola, do the Government accept that they must do much more than simply adumbrate the novel constitutional theory that those who lose an election are entitled to a coalition government? Does not that encourage Dr. Savimbi in his recalcitrance? Is it not time for the Government to stop pussyfooting about with even-handedness, saying that each side must refrain from violence, when the clear responsibility lies with UNITA to accept the election result and carry on a democratic Government?

Mr. Lennox-Boyd: I do not think that the hon. Gentleman has accepted the significance of what Mr. Savimbi said two days ago when he said that the country must move forward on the basis of the election result. Surely that is a great step forward.

Mr. Garnier: My hon. Friend may know that my right hon. Friend the Secretary of State has written to me recently about British training of the South African police. Can my hon. Friend say whether any steps will be taken in the near future to offer such training? Does he accept that training in Britain would enhance the move towards full democracy in South Africa?

Mr. Lennox-Boyd: I am afraid that I am not in a position to give my hon. Friend any further information on the subject. There are several British policemen in South Africa as members of both the European Community observer teams—the one for the Goldstone commission and the European Community observer team generally. I am afraid that I cannot answer my hon. Friend's specific point this afternoon.

Mr. Donald Anderson: The Minister will be aware that the multi-racial Commonwealth, which encompasses most of the states in the region, has much credibility in South Africa among all the key players and can be a great force for good in South Africa. In those circumstances why do the Government continue to exclude themselves from the Commonwealth Committee of Foreign Ministers on southern Africa?

Mr. Lennox-Boyd: We have no intention at present of joining the Commonwealth Committee of Foreign Ministers on southern Africa.

Mr. Nicholas Winterton: Does my hon. Friend agree that we should have an even-handed policy towards all groups in South Africa and southern Africa? To that end


does he accept in his position within the Foreign Office that when President Lucas Mangope of Bophuthatswana comes to this country—a man who has sought to establish meaningful democracy in his part of southern Africa—he should have the opportunity, like members of the ANC and other groups in South Africa, of meeting members of the United Kingdom Government?

Mr. Lennox-Boyd: The gentleman will be able to make his request in the usual way.

Sir David Steel: Is the Foreign and Commonwealth Office aware of the important statement made the other day in Angola by the director-general of elections himself that in his view there were not enough international observers to make sure that irregularities did not take place? That is a moral which the Government should pass on to other African countries, notably Kenya, where elections are pending.

Mr. Lennox-Boyd: The right hon. Gentleman refers to Kenya. Of course there are a large number of countries where the moral should be considered further. As he will know, the election on 29 December will be observed by monitors and observers from the European Community, from the Commonwealth, and from the United States of America.

Mr. Grocott: Will the Minister take the opportunity in the House today to acknowledge the verdict of all the observers to the Angolan elections that those elections were free and fair? Will he pay tribute to the Angolan people for conducting those elections after so many years of tragic violence? Will he now take steps, through the international community, to ensure that UNITA accepts the election results and the fact that it must obey the terms of the peace accord? In particular, will he ensure that UNITA attends the newly elected Parliament and that its deputies are there to play a full part in the new Angola?

Mr. Lennox-Boyd: As I have said, UNITA has accepted the elections in the form that I have indicated. We hope that the peace process will continue, but I agree with the hon. Gentleman about the elections. We fully support the determination of the United Nations special representative in Angola that both the legislative and presidential elections were generally free and fair.

Hong Kong

Mr. Campbell-Savours: To ask the Secretary of State for Foreign and Commonwealth Affairs when he will next be visiting Hong Kong to discuss relations with China.

The Minister of State, Foreign and Commonwealth Office (Mr. Alistair Goodlad): My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has no plans at present to visit Hong Kong. However, my right hon. Friend was able to discuss a wide range of Hong Kong issues with the Governor during his recent visit to London.

Mr. Campbell-Savours: Why unnecessarily antagonise the Chinese by adopting such a beligerent tone during the course of negotiations with China? Would not a little bit of subtle diplomacy in the historic tradition of this great country be far more beneficial to British and Hong Kong interests?

Mr. Goodlad: As my right hon. Friend the Prime Minister told Vice Premier Zhu Rongji in London last week, the Government fully support the Governor's proposals. We consider that they reflect the wishes of the Hong Kong people and are consistent with the joint declaration of 1984 and the Basic Law. The Governor's aim is to make the Hong Kong Administration more effective and accountable and the electoral system as fair, open and broadly based as possible. He is proposing a modest extension of democracy, consistent with the agreements that we have reached with China. Our policy in dealing with China over Hong Kong has remained the same. We want co-operation and a smooth transition in 1997. We remain ready to discuss the Governor's proposals and it will then be for the Legislative Council in Hong Kong to take a decision.

Mr. Sims: Can my right hon. Friend confirm that the Governor's proposals have been warmly endorsed by the Legislative Council and that opinion polls show that they are fully supported by the people of Hong Kong? If the Government and the People's Republic of China believe that those proposals are in any way incompatible with the joint declaration and the Basic Law, could they be invited to point out where those incompatibilities occur?

Mr. Goodlad: My hon. Friend is extremely knowledgeable about Hong Kong and what he says is absolutely right. It is now time for calm discussion.

Mr. Rogers: Putting aside the issues of the Governor's style and timing, will the Minister assure the House that the Government will stand firm and support him against the substantial pressures that are being put on him? Does he accept that there is much support within the House for the proposals which, as the Minister said, extend the democratic process in Hong Kong?

Mr. Goodlad: I am extremely grateful to the hon. Gentleman for what he has said. Of course, the Governor has the full support of the British Government and of hon. Members on both sides of the House.

Mr. David Howell: Given that the Beijing Government are showing the minimum possible understanding of what the Governor of Hong Kong is trying to achieve through his reforms, will my right hon. Friend encourage the Governor to explain to the Beijing Government that the moderate democratic reforms proposed are not just consistent—the word that my right hon. Friend used—with the Basic Law but necessary to make Hong Kong operate now and, after 1997, as a special administrative region as part of two systems within one country? Without those reforms, the success of Hong Kong will be jeopardised, to the great detriment of the world and the People's Republic of China.

Mr. Goodlad: My right hon. Friend is right. It is in the interests of Britain, China and the people of Hong Kong that Hong Kong remains successful until 1997 and beyond. The best way to achieve that is through co-operation based on the joint declaration, which is what we are seeking to achieve in the proposals.

Arms Sales (Iraq)

Mr. Mackinlay: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions were held with the United States about the sales of arms to Iraq in the 12 months preceding the invasion of Kuwait; and what information on the United Kingdom sales of arms to Iraq was volunteered to the United Kingdom's allies following the invasion.

Mr. Hurd: There were discussions at various levels with United States authorities on issues arising from the Iraqi arms procurement programme in the year leading up to

the invasion of Kuwait. As part of the preparations for the liberation of Kuwait, there was a full exchange of information on all aspects of Iraq's military strength.

Mr. Mackinlay: Is it not a fact that in June and July 1990 the United States Administration requested that the British Government should co-operate in halting the export of two furnaces being constructed in Strathclyde on behalf of the Consarc Engineering Corporation of America? The request was made as the United States intelligence services advised the British Government that the furnaces were to be used to help in the construction of missile components in Iraq.

Mr. Hurd: I would need notice of that question.

Citizens Charter (White Paper)

The Chancellor of the Duchy of Lancaster (Mr. William Waldegrave): With permission, I should like to make a statement about the citizens charter.
The citizens charter White Paper, presented to the House in July 1991 by my right hon. Friend the Prime Minister, launched a radical and far-reaching programme of reform and improvement of public services. I am pleased to be able to report today that we are delivering that programme and now developing it still further.
The White Paper "Citizen's Charter First Report: 1992", published today—copies of which are available in the Vote Office—reports much more progress than I can list in this statement. Just 16 months into the 10-year programme, more than 90 per cent. of the 150 or so initial commitments in the citizens charter White Paper have been met or are in hand; and there is a substantial future agenda of more than 80 pledges of further action. This is a formidable record.
I would like to give the House one or two examples of what the charter is delivering. In health, we set maximum waiting times of two years for admission to hospital. That target is being met virtually everywhere. In England, in the year to March 1992, the number of people on waiting lists for more than two years had fallen from more than 51,000 to less than 1,700.
In education, the parents charter is providing parents with more information than ever before about their children's schools, starting with written reports and league tables of exam results, and going on to national curriculum results and truancy rates. We have set up the Office for Standards in Education to ensure that schools are regularly inspected, that parents receive inspectors' reports and that inspection teams include people from outside the education profession who can look at the school from the parent's point of view.
British Rail now publishes punctuality and reliability targets, and performance against them. There is compensation when those standards are not met. Privatisation will open up opportunities for competition and innovation, and will make best use of the railways for the benefit of its passengers.
On motorways, private developers are being encouraged, through relaxation of the regulations, to build more service areas to give drivers more choice and more competitive services.
Services are being improved to meet what users say that they want: driving tests available on Saturdays; evening sittings in some courts; tax inquiry centres to provide local point of contact for taxpayers; utility companies moving towards fixed appointment systems.
We have brought in legislation where necessary to meet our objectives—for example, the Education (Schools) Act 1992, and the Competition and Service (Utilities) Act 1992 —and we will continue to do so where there is need. For example, the Local Government Bill currently before the House will, if approved, give council tenants a new right to repair and a new right to improve and to get compensation if they improve their own homes and then move. It will also extend compulsory competitive tendering to improve local authority housing management.
Many of those standards of service are set out—often for the first time—in the 28 charters now published for

users of the key areas of public service—for patients, parents, passengers, council house tenants, job-seekers, Benefits Agency claimants. The latest of these is the courts charter, announced today by my noble and learned Friend the Lord Chancellor.
Setting out the initial baseline of standards is therefore virtually complete for many of the main public services. This is part of the wider transformation of the way public services are run, moving away from the old command structures to more open, responsive management by clear and published contracts, which empower managers with the authority to run their organisations in the way that best suits the needs of those who actually use the service.
The emphasis will now shift to ensuring the delivery of standards and progressively improving them. We will do that in a number of ways. Performance-related pay is being introduced to make sure that good performance is recognised and poor performance identified. Many agency chief executives, for example, are on terms which include a performance-related element. Published information of performance against standards will be backed up by regular systematic surveys of the public's views of their public services.
Next, it is vital that public services be provided by the most competitive supplier—public or private—which offers the best quality of service and value for money for the user and the taxpayer. Wherever it is feasible and desirable, we will therefore continue to privatise services.
Where responsibility for services remains in-house, we shall market test them. I am pleased to announce today a fiftyfold increase in the targets set for the market testing of activities by central Government. In previous years, an average £25 million-worth of services were tested against the market. By next September, we plan to test services worth £1·5 billion.
We have made a formidable start on the objectives that we set ourselves, and the programme will continue to develop. The White Paper published today sets out a further extensive agenda of future action, including extending the patients charter into primary care; tightening targets from April 1993 to a maximum of 18 months for admission times to hospitals for treatment of hips, knees and cataracts; and publishing a further and higher education charter setting out for the first time the standards of service which students can expect when they attend university or college. Further action will also include updating and reissuing the parents charter later next year; setting new standards for British Rail; publishing of league tables so that people know how well their local authority is performing; and piloting a charterline telephone information service aimed to lead to a national service.
Good public services are essential for those who rely on them, and it is vital—never more so than today—that no money be wasted in their provision. The citizens charter programme of public service reform and improvement is at the heart of the Government's agenda for the 1990s. The White Paper will be a baseline from which to chart future progress. I commend it to the House.

Ms Marjorie Mowlam: If the Minister were serious about quality public services, he would have announced a long-term commitment to the public sector. He has failed to do so. Instead, he has given us another glossy document full of regurgitated facts, many of them published a number of times already. The Government


have already spent £7,500,000 on the publication of the citizens charter and its departmental progeny, and I seriously question whether yet another glossy document represents value for money.
The Minister got one thing right in his statement—that consumers' and citizens' rights are crucial. [HON. MEMBERS: "Ah!"] I am pleased that Conservative Members agree. Their problem is that the public agree too, but they view the Government's citizens charter as farce and hype. The bottom line is that that is all it is.
Does the Minister agree that people's daily experience of British Rail is not, contrary to what he has just stated, satisfaction with published punctuality and reliability targets but a slashing of the budget of the Department of Transport which has resulted in declining standards and, as we learned this morning, a question mark over safety?
The Chancellor of the Duchy has had the cheek to mention targets. Targets were set below the level that many train services were already achieving, yet the Government hold up the targets as an example of the charter's success.
Does the right hon. Gentleman agree that people's day-to-day experience of the health service is, again, a cut in spending? There is the two-year target for waiting lists, but the right hon. Gentleman has failed to tell the House that the number of people waiting for one year has increased phenomenally. The Government are playing with statistics. The people's experience is different from the picture that the Government paint, and they know it.
Will the right hon. Gentleman agree also that people's day-to-day experience of public utilities is not one of deep and sustained pleasure as a result of having appointment times and meeting people with name tags, important and helpful though those things are? Instead, there is deep dislike and distrust because the chairmen of public utilities have been having pay increases of 20, 30 and 40 per cent., yet the Government expect public sector workers to take a cut in pay. At the same time, they expect public services to improve. The right hon. Gentleman acknowledged last week at Question Time that the morale of staff is crucial. When the Government are cutting wages of public sector workers, how can the right hon. Gentleman expect morale to be high?
Does the right hon. Gentleman agree that our citizens need basic rights—for example, access to information and to opportunity—that the charter does not deliver? The Government have greatly cut legal aid budgets, and as a result 10 million people no longer have the ability to use legal aid to appeal for their rights. The Government have cut the funding of citizens' advice bureaux and of voluntary centres that give people the chance to appeal and make complaints. That is the reality of what the Government have done.
Does the right hon. Gentleman accept that the public's sceptical view of the charter is a sad outcome because, as I have said, the basic idea is a good one? [HON. MEMBERS: "Ah."] I am pleased that Conservative Members agree. It is a good idea for the simple reason that the Labour party proposed the citizens charter first.
I have recently completed a survey of all local authorities. I have found that more than a third of them had implemented many of the quality management aspects of the charter before the Prime Minister ever dreamed of making it the centre of his domestic policy. It is the only policy that he has left.
Does the Chancellor of the Duchy agree that the Government have twisted the idea of the charter to provide another instrument or means of attacking local authorities and local democracy? The Government are against local democracy and public services. As the right hon. Gentleman made clear this afternoon, they are interested in privatisation and contracting out. That is the ideological dogma that drives the Government to say that the private sector is good and that the public sector, whatever it does, is bad.
Privatisation and contracting out was the agenda of the 1980s. We want to see quality public services, and that is the agenda of the 1990s.

Mr. Waldegrave: I warmly thank the hon. Member for Redcar (Ms. Mowlam) for having had the courage to say—we do not often hear it said by Opposition Members —that we have a good idea and that she supports the principles of it. She even referred indirectly to President Reagan, who always liked to say, "If your opponents have a good idea, claim you invented it." I am extremely grateful to her.
The hon. Lady made the important point that both sides of the House are united in the campaign for better public services. Again, I am grateful to the hon. Lady for that. I am delighted that she shares the Government's long-term commitment to good public service.
I welcomed the hon. Lady's commitment to consumer rights. That is not the view expressed so eloquently by the hon. Member for Bolsover (Mr. Skinner) when I was last at the Dispatch Box, when he referred to "consumerist crap", if I may use the phrase. I apologise, Madam Speaker, but it is a direct quotation.
The hon. Lady talked about the daily experience of British Rail. I agree that it is unsatisfactory for too many of our fellow citizens. The way to get things put right, however, is to acknowledge honestly where the problems are, to put the spotlight on them and to drive up standards. That must be the first approach, and that is what the passengers charter is all about. There have been no spending cuts: there has been a major increase in spending. Total waiting lists and the two-year waiting list are down.
I agree with the hon. Lady, although her party has not shown much sign of agreeing with her and me on this, that information is absolutely vital for the consumer. That is why the campaign to publish education information is welcomed by my hon. Friends. I do not know whether Labour has done a U-turn on that or whether it has turned full circle. The hon. Member for Stoke-on-Trent, Central (Mr. Fisher), who is seated beside the hon. Lady, has a good record on information issues. For that reason we welcome the hon. Lady's support, if that is what it is, for the publication of education information last week by my right hon. Friend the Secretary of State for Education.
The hon. Lady said that legal aid had been cut. It has doubled over the past four years and will increase by 10 per cent. a year in the years ahead. Unfortunately, the hon. Lady was wrong about that, but let us not concentrate on the small elements that were wrong. We must welcome the lamb that joins the flock and say that we are grateful for her support for this campaign.

Sir Dudley Smith: Is my right hon. Friend aware that, despite the Opposition's sour grapes, many people recognise the significant advances that have been made as a result of the charter? Some of


those advances have been better than others. Speaking from personal experience—I am sure that my experience can be replicated elsewhere—I know that the South Warwickshire health authority has had a considerable reduction in waiting times. It also has the appreciation of patients and a recognition by the staff that even greater targets will be achieved in the early part of next year.

Mr. Waldegrave: In my present job and in my previous one I was impressed by the way in which the health service was taking ownership of the patients charter. The best of the public services want to make their services better. In setting the standards, we have sought to find best practice wherever we can—for example, in South Warwickshire —and have then said that such standards should be spread across the service. That is the principle behind the setting of standards in the citizens charter.

Mr. Matthew Taylor: The Minister spoke about waiting times in the health service over two years up to March this year. What has happened to those times since the general election?
The right hon. Gentleman also spoke about the rail charter and new rail targets. Can he confirm that British Rail has asked for a relaxation of the original targets and say whether he will respond to that request?
The right hon. Gentleman spoke about his support for open information on Government activities. I understand that he pressed Lord Trefgarne and Alan Clark to make available the information on the revised guidelines on Iraqi arms sales. Why did that not happen and, as assistant citizens charter Minister, what does he propose to do to make sure that it happens in future?

Mr. Waldegrave: On the first point, I can report further good news that will please the hon. Gentleman, who is a fair-minded person. The over-two-year waits in the regional health authorities as opposed to the special health authorities, which have a particular problem at Hammersmith hospital, are now down to five. Therefore, there have been major further improvements since April.
British Rail standards are being negotiated for next year with my right hon. Friend the Secretary of State for Transport. The Government presume that the standards will rise and not fall. That should be made clear.
On the hon. Gentleman's final point, I am sure that he will agree that it is far better to leave such matters to Lord Justice scott.

Mr. Michael Jopling: The Secretary of State said that announcements were being made today about the legal system. Given the intolerably high costs of that system, does my right hon. Friend not realise that some parts of the citizens charter seem fairly hollow to those of modest means who fail to qualify for legal aid and who find themselves confronted on the one hand by people with massively greater means, or on the other by people who get considerable assistance through legal aid?

Mr. Waldegrave: The courts charter, which my right hon. and learned Friend the Lord Chancellor published today, addresses in an extremely practical and sensible way a whole range of issues which, on my experience of constituency cases, greatly worry and upset people

occasionally. Those include, for example, long waits in court, unpredictability and opaqueness of procedures. It is important to deal with those matters.
My right hon. Friend asked about legal aid. The figures for public expenditure on all programmes in recent years show the extraordinary way in which the legal aid programme has expanded faster than almost any other. My right hon. and learned Friend the Lord Chancellor is right to look with a radical eye at the growth of that programme.

Mr. Harry Barnes: The basic, fundamental citizens' right on which all other citizens' rights depend in a democracy is the right to vote. Why is there nothing in the citizens charter about the disgraceful state of electoral registration? Why have we not been fully informed of how many people are on the register, and of how many should be on it?
If we are serious about charters, let us return to the charters of the 19th century, which were intended to extend the franchise and to ensure that everyone had a say in a developing democracy.

Mr. Waldegrave: If the hon. Gentleman wishes to raise particular points about how the registers are kept, it is perfectly legitimate for him to do so. If the subject is raised, however, some Conservative Members may wish to consider whether it is sometimes a bit too easy to get names on to the list without their being properly checked. Such matters should be examined from time to time, and they are examined.

Sir Paul Beresford: I thank my right hon. Friend for his statement. I especially welcome the line about competitive tendering. It is likely to prompt a small fracas of complaint, especially from some sectors of local government—although other sectors will be murmuring that it is about time, and asking why the move did not come a little earlier.

Mr. Terry Lewis: Is this a question?

Sir Paul Beresford: It will be, if the hon. Gentleman sits tight.
Is my right hon. Friend aware that many of the complaints that will come from local government will relate to the responsibilities of the client side and its failure to put contracts in order rather than to the competitive tendering system? When he considers the length of contracts, will he seriously consider leaving the contracts long enough to justify the investment of contractors in both capital and training? I am thinking of a norm of five to seven years.

Mr. Waldegrave: Having led a well-known local authority not far from here, my hon. Friend has considerable experience of these issues. He was very successful in achieving better value for money from both public and private sectors, thus benefiting the citizens of Wandsworth.
My hon. Friend's final point is very important. Whether contracts are run by outside contractors or by an in-house team, there should be enough security in terms of length to allow capital and training investment when that is right. The length of contracts will vary from function to function.

Mrs. Helen Jackson: Does the right hon. Gentleman agree that the drastic reductions in


funding for urban programme inner-city projects—it is down to £176 million for next year, and will decrease further for the following year—will have a fundamental effect on access to information and advice about welfare benefits for people in deprived inner-city communities? Will not that increase the scepticism and cynicism with which poor people view the so-called citizens charter?

Mr. Waldegrave: I do not think that there is scepticism and cynicism about a campaign to raise the standards of public service. The hon. Lady failed to mention the large increase in resources for city challenge. I was in Bolton and Wigan yesterday, and there was great rejoicing in both towns about the arrival of large quantities of city challenge money.

Sir John Wheeler: The public will welcome the continued progress of the citizens charter, while recognising that there is still a long way to go. Employees in the public service will also welcome it, because they are also consumers and because they will derive job satisfaction from the improvement in the quality of services.
The announcement of the courts charter is also welcome, but what can my right hon. Friend tell us about the 52 police forces? Are they included in the citizens charter?

Mr. Waldegrave: My hon. Friend is quite right: all the evidence that I have received when meeting the staff of many organisations up and down the country shows that our ideas are very welcome. I acknowledge that we are taking those ideas from the staff of such organisations, and then spreading high standards throughout the public service.
The police are not directly accountable to Ministers as the civil service is, and it is for them to produce their own charters locally. Some police forces have already done so: I am happy to say that my own, the Avon and Somerset force, has produced a very good charter. I was present at its launch.

Mr. Bob Cryer: Does the Minister accept that this is a PR gloss to cover the looting of public services by Tory business men who contributed to Tory party coffers? Does he not think that it lacks credibility when it comes from a Minister who talks about the need for information but who wanted to prevent information from going to the courts by signing a public interest immunity certificate? When does the Minister intend to produce a charter that defines the difference between the public interest and Tory party interest when Ministers sign public interest immunity certificates?
Will the right hon. Gentleman produce a charter that results in performance-related pay applying not just to chief executives but to Tory Ministers as well? Or would they not do very well?

Mr. Waldegrave: I think three out of 10, according to the hon. Gentleman's usual sneer score.

Mr. Gyles Brandreth: As the grateful recipient of a refund from British Rail for a severely delayed train, may I congratulate my right hon. Friend on a charter that delivers the goods to one and all, including Members of Parliament? I urge him to continue with the

progress that he has already made. Can he say what percentage of the initial charter commitments has been completed before we embark on the second phase?

Mr. Waldegrave: I would much rather that there was no requirement for refunds and that all trains ran on time. In the meantime, however, it seems to me that refunds are a good way of signalling to the management of British Rail that services should improve and of bringing some help to people who have been inconvenienced.
The answer to my hon. Friend's second point is, about 90 per cent.

Mrs. Bridget Prentice: I have written to the Secretary of State today on behalf of a constituent who feels that, in the case of British Rail, the citizens charter is a sham. A year ago, there were six trains an hour that could take him to work; now there are three. The citizens charter, he believes, means that British Rail will devise a timetable to suit the trains rather than the trains to suit the timetable, and that people will be unable to get discounts.

Mr. Waldegrave: No, the latter technique would not be a satisfactory way of meeting targets and that is not how it will be done. I shall of course look at the hon. Lady's letter to me. I cannot guarantee, nor can the chairman of British Rail, that all British Rail services will remain at exactly the same frequency for the rest of time. It would be foolish of me to commit myself to that.
We should stop knocking British Rail. It is trying to raise standards and is being entirely honest about where it is not meeting proper standards at the moment. Investment in British Rail is at a record level—far greater than when the Labour party was last in power. Services should therefore improve.

Mr. Iain Sproat: I warmly welcome the tremendous list of achievements that the citizens charter has already brought about. I welcome also the increasing momentum for citizens charter aims for the future. In particular, I warmly welcome what my right hon. Friend said about market testing. Does he agree that the result will be that the public as taxpayers will get better value for money and that the public as consumers will get better services?

Mr. Waldegrave: My hon. Friend is entirely right. Having taken money from hard-pressed taxpayers, it must be our duty to ensure that we spend it in such a way as to obtain the right quality and quantity of services, at the right price. That is what market testing is all about. In many cases, as the smaller programme showed, the contracts will be won by the in-house team. Major efficiency gains of up to 25 per cent. have been made. Therefore, the citizen, both as taxpayer and as the user of services, will welcome the policy.

Mr. Dennis Skinner: Is the Minister aware that, on page 25 of the citizens charter, we are told that, when telephoning the Employment Service, the average time taken to answer the phone is half a minute and that, if it takes longer, than that we can complain? Yesterday, while I was dealing with a constituent's case, it took a. quarter of an hour for the Department of Social Security office, just down the road, to answer my phone call. The reason is that the number of staff has been cut and that


there are so many people with complaints against the DSS and the Employment Service. Nearly 4 million people are out of work. That is why they cannot answer the phone.
As for the consumer crap to which the Minister referred, yes, pensioners want money, the homeless want houses and schools need to be repaired. That is what the Government should be doing instead of trotting out these glossy documents that do not add up to a row of beans.

Mr. Waldegrave: I give that perhaps five out of 10.
On the substantial point, I believe that the hon. Gentleman now has a standard against which to measure complaints. If the service is not good enough, I think that he has a measurable complaint to make. The hon. Gentleman has obviously read the White Paper closely up to page 25, which reports on the client satisfaction rating of the benefit services in integrated offices, benefit services in non-integrated services and jobcentre services. They all have high levels of satisfaction.

Mr Roy Thomason: Does my right hon. Friend agree that the establishment of arm's-length service providers is an opportunity for the Government to control the quality of services? Such control does not exist for in-house providers. Does he agree that the difference between him and Opposition Members is that he is concerned about the consumer, not the provider of public services?

Mr. Waldegrave: My hon. Friend, as a former chairman of the Association of District Councils, has great experience in such matters. It was not only on his side of the local government divide that people believed what he has said. I quote Sir Jeremy Beecham, the leader of the Newcastle city council:
The drawing up of specifications and tender documentation gave a fresh insight to members and officers alike in the consideration of what had often been taken for granted and, in terms of financing, dealt with on an incremental basis. Though it would be a mistake to push the argument too far, the purchaser-provider split and the development of Service Level Agreements between the provider of central services within authorities and client departments have caused a re-examination of performance, with generally beneficial results.
None of the Opposition Members I am looking at has run things for a long time. Those hon. Members on the Labour side who have run things know the truth of what I am saying.

Mr. John Gunnell: Does the Minister agree that the panoply of citizens charters is rather short on those which enable members of the public to complain about the effects of Government actions on their lives?
I received a letter from a constituent who runs an organisation called Belle Isle Elderly Winter Aid. It provides much help for the elderly in the area. It was encouraged to put in a detailed bid for work which needed to be done for the elderly through the urban programme. The bid was accepted by the city council as one of the new starts in the urban programme. The organisation wrote to me and asked me to bring to the attention of the Government its concern that the work which it does among the elderly has been short-changed by the decision of the Secretary of State for the Environment to stop new work on the urban programme.
Does the Minister think that there should be some mechanism in the form of a citizens charter to enable those people who have done the work to bring to the Government's attention their anger and concern for the elderly who are their responsibility?

Mr; Waldegrave: I exempt the hon. Gentleman from my previous remarks about not running things; he was a distinguished leader of a local authority.
I said earlier that the huge additional resources which are being provided through city challenge to many of the same areas and objectives had perhaps been underestimated. Of course, that has meant a restriction on the growth of the main traditional urban programme. I will draw the attention of my right hon. and learned Friend the Secretary of State for the Environment to what the hon. Gentleman said.

Mr. John Butcher: I congratulate my right hon. Friend on the ethos of what he has announced today, and especially his statement that he will provide us soon with an opportunity to compare the performance of local authorities on a like-for-like spending basis.
Will my right hon. Friend focus on the courts charter? There is a feeling among our people that access to the courts is now for the very rich or the very poor. People believe that justice delayed is injustice—and there is far too much delay; that lawyers seem to make large sums of money by causing delay; that crooks can too easily intimidate witnesses and that those witnesses who have the courage to go to court often come away feeling bruised and shaken by the whole experience. We are talking about the rule of law. I am sure that my right hon. Friend recognises the rule of law as a top priority for his charter.

Mr. Waldegrave: I welcome both parts of what my hon. Friend said. First, the Audit Commission's work on comparative indicators for local authorities is essential and it will be strengthened. I predict with absolute certainty that, when the comparative tables are published, we shall have exactly the same uproar from all the provider groups represented by Opposition Members as we had about the education information. It will be as wrong then as it was on education.
My hon. Friend touched on important matters with regard to the courts. The charter attempts to deal with some of the difficult issues that he raised, such as explanation of what will happen before people act as witnesses. I have had constituency cases in which a great deal more could have been done in that respect. The charter also sets standards for some of the very matters to which my hon. Friend referred.

Mr. Barry Jones: Will the right hon. Gentleman please tell us about the plans for an inspectorate of magistrates courts? We should like to know about the personnel and the control of that inspectorate. Is he aware that in Wales tens of thousands of people will lose their access to free legal aid? That is in a country of low pay and major pockets of poverty. When it is proposed to close magistrates courts, will the consumer —the community—be allowed to give a view? If courts are closed in large counties such as Clwyd, Dyfed and Gwynedd, that will impose long travelling times and great


expense on people who have to go to the court. We need answers; I hope that the right hon. Gentleman will give some.

Mr. Waldegrave: The inspectorate of magistrates courts will be responsible to the Lord Chancellor. It will attempt to carry across best practice from magistrates courts around the country and ensure that standards are levelled up. That is a sensible way of proceeding. The magistrates courts are a pluralistic world.
On the second point, it is sometimes necessary to centralise courts. It is almost always unwelcome. Yesterday in Bolton—I draw this to the attention of my hon. Friend the Parliamentary Secretary to the Lord Chancellor's Department—I was shown an example of courts which are out of date and difficult to use. It is sometimes necessary to build new courts and sometimes to centralise them, if the services which modern standards require are to be available in those courts.

Mr. Richard Tracey: The Government are moving forward at an acceptable pace with this policy. That contrasts with the groaning and giggling that we have heard this afternoon from Opposition Members. How many Labour local authorities reached the necessary standard for a charter mark? Will he amplify what he said this afternoon about the pilot charterline?

Mr. Waldegrave: The South Yorkshire police is one authority that immediately comes to mind which reached charter standards.

The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): Kent county council.

Mr. Waldegrave: Kent is not by any stretch of the imagination a Labour council, but it won a charter mark.
The charterline is an important initiative. I was asked about complaints being effective. A charterline with a single number which will key people into information and complaints systems across the public service will be a major gain for accessibility of the public service to the ordinary citizen.

Mr. John Fraser: The Chancellor will recall from his time as a Foreign Office Minister that people have to pay for visas to come to Britain. The visa service in many overseas posts is indifferent and 20 per cent. of all appeals against decisions of visa officers are upheld. How is it consistent with the citizens charter to remove the right of appeal against the refusal of a visa, as the Government will do under the Asylum and Immigration Appeals Bill?

Mr. Waldegrave: As far as I can remember, the right of appeal was removed in cases where the right was technical and there was no chance within the rules of the appeal succeeding.

Mr. Geoffrey Clifton-Brown: I congratulate my right hon. Friend on his announcement, representing as it does a fiftyfold increase in market testing. Does he agree that the new arrangements represent as profound a beneficial change in the delivery of our great public services in the 1990s as did those which we brought about in the private sector in the 1980s?

Mr. Waldegrave: What my hon. Friend says is right. The revolution in the method and standards of delivery for public services is not confined to this country. Most countries are addressing that agenda, but I genuinely believe that the United Kingdom is ahead, and that we have a more coherent and thoroughgoing philosophy in that respect. The international conference which we intend to hold next week in the Queen Elizabeth II conference centre will bring together people from all over the world to discuss those issues, and it will show that that is true.

Ms. Mowlam: As the Minister has in some senses shown this afternoon, the reality behind the charter is that he has lowered the aspirations and has not secured the achievements. He has also misled the House: he said that 90 per cent. of the original charter aims had been met, yet he has no basis for that statement. He has not polled the consumers; nor has he written to all the local authorities, health authorities or police authorities so as to have any measure of the Government's success. We can answer the question whether Labour local authorities have delivered, because we have written to every body mentioned in the charter. We have a fund of information on what has and has not been achieved. The Minister has not even bothered to talk to many of the organisations.

Mr. Waldegrave: Many local authorities have sent me copies of the letter which the hon. Lady sent to them.
The whole basis of the operation is consultation with users and services. That is the principle on which we are working.
On the subject of our pledges, the original White Paper contains a range of things which we said we would do—and those are what we have done. I by no means say that every standard has been met. If that were so, it would prove only that the standards were too easy. In many respects, as with British Rail, there must now be a drive to correct the situation in areas where our work has shown that the standards are not being properly met.

Fuel Cost Credits

Mrs. Alice Mahon: I beg to move,
That leave be given to bring in a Bill to allow fuel cost credits to be paid from the National Insurance Fund in order to assist those who are on low incomes, or who are otherwise vulnerable, with fuel costs; and for connected purposes.
My Bill would mean that all householders on benefit would receive a weekly fuel credit towards heating costs from 1 December to 31 March. The value of the credit would be graded into four zones according to climatic conditions. The Bill is identical to the Cold Weather Credits Bill introduced last year by my hon. Friend the Member for Dumbarton (Mr. McFall). I agree with him and with the Campaign for Cold Weather Credits that such a system, linked to the urgently needed expansion of the home energy efficiency scheme, would begin to tackle fuel poverty. It would be a massive improvement on the present miserable scheme which can help only 200,000 people, not the millions who need help.
Later today, there will be much talk about pay freezes. Many Tory Members who earn three times their salaries by moonlighting will pontificate at length on the need to freeze the pay of low-paid employees. However, the freeze that I am talking about is of far more concern to my constituents—it is the cold this winter which many people, mainly the elderly, dread.
As I seek leave to bring in my Bill, it is warm and comfortable in the Chamber. When hon. Members leave the House tonight, they will go home to warm, comfortable flats and houses. That is not the case for the 7 million households in Britain where people live in fuel poverty, unable to keep themselves at the minimum standard for healthy living recommended by the World Health Organisation. The £50 million which the Government found so easily at the beginning of this week for the restoration of Windsor castle would have insulated about 250,000 of those households.
I ask hon. Members to consider how many death certificates in England and Wales mention hypothermia as a main or contributory cause of death. In 1991, there were 534—almost a 50 per cent. increase on the previous year. That is a shameful statistic. However, shocking as it is, it does not tell the full story. We should be asking how many people died for cold-related reasons, because often that does not appear on death certificates. However, it is clear from Government statistics that, between April 1990 and 31 March 1991, almost 500,000 people aged over 60 died. Of those, 230,000 died in the summer months from April to September and 270,000 died in the winter months from October to March. It is clear that there is a much higher death rate among that age group in the winter.
The Department of Social Security has created what it calls an "excess winter deaths" measure. In a comparative survey of winter deaths in 10 countries with similar cold climates, it was established that the number of deaths in January is generally 10 per cent. higher than average. In Scotland, it is 16 per cent. higher and in England and Wales it is a staggering 19 per cent. higher. By comparison, in Germany the increase in the number of deaths in January is only 4 per cent. In Sweden and Norway, countries that are known for their cold climates, the number of deaths in January is only 7 per cent. above average.
From the Government's evidence, I conclude that elderly people in Britain are at greater risk of dying in winter than elderly people living in other EC countries. I wonder how the Prime Minister will explain that to Ministers when they meet in Edinburgh in December. People who long for a white Christmas should reflect on the fact that, with Britain's current fuel poverty, for every degree celsius a winter is colder than average, there are another 8,000 "excess" deaths of old people.
Cold not only kills; it also causes disease and illness. The national health service spent £800 million on treatment for avoidable conditions—bronchitis, respiratory diseases, pneumonia and illnesses associated with, and created by, people living in cold damp conditions.
The causes of those avoidable deaths and diseases are simple: low incomes and poor quality housing. It is a disgrace that, on the day when I have the opportunity to introduce my Bill, the Minister for Housing and Planning has refused to visit a group of people living in system-built houses, whom my hon. Friend the Member for Leeds, West (Mr. Battle) and I visited and who are suffering particularly from inadequate housing, which causes so many problems.
There is a huge problem, but what do the Government do about it? They offer a totally inadequate cold weather payments scheme. If one is lucky, that scheme will provide a couple of £7 payments. The scheme costs 50p to administer for every £1 paid in benefit. It comes into operation once it has been triggered by a very complex system, which actually cheated 7,000 claimants in Calderdale last year because the weather station was situated 15 miles away.
The payments go only to some people on income support—not to all. In 1990–91, only 1·4 million households shared just £8·6 million of benefits. That should be compared to the £800 million spent by the national health service on cold-related diseases, and we should ask ourselves whether the Government spend our money wisely.
The Government have tried to sell what is, in fact, the Prime Minister's scheme, as it was introduced when he was at the Department of Health and Social Security. That scheme is a failure. It is simply a glossy public relations exercise. The Government overrule the trigger and make payments automatic only when it is cold on the Embankment and they are ashamed and embarrassed and forced to act. They then believe that the problem has gone away, but it has not if one is old and cold and relies on the benefits that the Government believe are adequate for people to live on.
My Bill is an opportunity to do something now rather than do too little, too late, as happens so often with the Government. Why was not reducing winter deaths and the number of people dying from hypothermia a target area in the "Health of the Nation" White Paper? It is appropriate that I should call for that matter to be included with special targets. For example, let us try to achieve the EC average by the year 2000. That is not too much to ask. We should also call for an interdepartmental committee of Social Security, Health, Energy and Housing Ministers —that is, if the Minister for Housing and Planning deems it appropriate to turn up—so that a concerted and co-ordinated effort can be made to tackle the problems of being old and cold.
I should also ask the question that thousands, if not millions, of people are asking at present. With the current


dispute in the coal industry, how can anybody justify one cold-related death when we have so much coal in the ground? We should aim to keep miners in work and let them dig the coal to stop the tragic and unnecessary cull of the elderly.
If the Department of Health, with its "Keep Warm This Winter" telephone helpline, which last year received more than 21,000 calls—mainly from elderly people asking for help with fuel bills and insulation costs—is serious, it will add its considerable weight to supporting the Bill. For all its public relations, the Department knows that not one person who called could obtain help with a fuel bill or with insulation costs, which is what the majority of them asked for.
We want real help for elderly people. We do not want what the hon. Member for Derbyshire, South (Mrs. Currie) offered when she was at the Department of Health —advice that pensioners should knit woolly hats. We want real help. I call upon the Government to accept my Bill and to stop those outrageously unnecessary deaths.

Question put and agreed to.

Bill ordered to brought in by Mrs. Alice Mahon, Mr. John McFall, Mr. Bob Cryer, Mr. Malcolm Chisholm, Ms. Ann Coffey, Mr. Harry Cohen, Mrs. Helen Jackson, Mr. David Winnick, Mr. Bill Michie, Mr. John Battle, Mr. Eddie Loyden and Mr. Dennis Skinner.

FUEL COST CREDITS

Mrs. Alice Mahon accordingly presented a Bill to allow fuel cost credits to be paid from the National Insurance Fund in order to assist those who are on low incomes, or who are otherwise vulnerable, with fuel costs; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11 December and to be printed. [Bill 90.]

House of Commons (Members' Salaries)

Madam Speaker: We now come to motion No. 1 on Members' salaries. May I remind the House that I have selected the amendment standing in the name of the right hon. Member for Manchester, Wythenshawe (Mr. Morris)?

Mr. Bob Cryer: On a point of order, Madam Speaker. A question arises over the absence of the Register of Members' Interests. During the debate, as in other debates, hon. Members will have to declare their financial interests outside the House. However, page 386 of "Erskine May" says:
"So far as voting in the House or a committee is concerned, and for this purpose only, the recording of an interest in the Register of Members' Interests is by itself regarded as sufficient disclosure"
to follow the resolution of June 1975 requiring disclosure. As no register is available, it is not open to hon. Members to rely on that.
Therefore, I ask you, Madam Speaker, to guide the House and to suggest to hon. Members that, on this occasion when we are dealing with Members' salaries, hon. Members who take part in the debate should actually declare the amount of their outside earnings, and that, if any hon. Member should so wish to do, they make their position clear on a point of order because there is no Register of Members' Interests, which is entirely due to the incompetence or ill will of the Government. That might help to remedy the position sketched out on page 386 of "Erskine May".

Madam Speaker: I expect all hon. Members who speak in the debate to declare their interests, but I cannot expect hon. Members to declare the amount of that interest. Should they wish to do so, of course they are perfectly at liberty so to do. It does not, of course, in a debate such as this, affect the way in which an hon. Member votes in the Division Lobby. I would expect hon. Members to declare their interests in the usual way.

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I beg to move,
That the following provision should be made with respect to the salaries of Members of this House—

(a) the salaries of Members not falling within paragraph (b) shall, in respect of service in 1993, be £30,854; and
(b)the salaries of Officers of this House and Members receiving a salary under the Ministerial and other Salaries Act 1975 or a pension under section 26 of the Parliamentary and other Pensions Act 1972 shall, in respect of service in 1993, be £23,227.
I do not need to detain the House for a speech of great length. The motion is clear in content and in intention. It deals with 1993 only, and it provides for all hon. Members to receive the same pay next year as this. Thus, the full parliamentary salary would remain at the level in force since January 1992 of £30,854. That will also be the case for Members of the European Parliament, who are paid the same as Members of the House.
The motion specifically includes all those in receipt of a reduced parliamentary salary, because they also receive an official salary under the Ministerial and Other Salaries Act 1985. That covers all Ministers, the Leader of the Opposition and his Chief Whip and Deputy Chief Whip,


and those whom the Act describes as Officers of the House —Madam Speaker, the Chairman of Ways and Means and both you, Madam Deputy Speaker, and the other Deputy.
The motion also includes those receiving a reduced parliamentary salary because they are also in receipt of a pension under section 26 of the Parliamentary and Other Pensions Act 1972, although the only person covered by that part of the motion is my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), the Father of the House, as a former Prime Minister who is still a Member of the House.

Dr. Norman A. Godman: Have any representations been made by MEPs on that matter? What power have they to resist such a regulation?

Mr. Newton: I have taken steps to ensure that the position is known. The hon. Gentleman will know that it has been well established that the pay of MEPs is linked to that of Members of Parliament, and I think that that is understood and accepted by all concerned.
The reduced parliamentary salary for Ministers will remain at the level in force since January 1992, which is £23,227.
For completeness, although it does not arise directly from the motion, I should of course add that, as my right hon. Friend the Chancellor of the Exchequer made clear in his autumn statement, Ministers will also not receive an increase in their official ministerial salary in 1993. As Madam Speaker is already aware, I can confirm that the Government will not be bringing forward for 1993 an order under the Ministerial and Other Salaries Act 1975. So, for all those in receipt of the reduced parliamentary salary, there will also be no increase in 1993 in their official salaries.
The House is well aware of the context in which these propositions are put before it, and I will therefore touch on them only briefly. The Government's policy as regards public sector pay was clearly set out by my right hon. Friend the Chancellor in his autumn statement. Settlements in the year ahead across the whole of the public sector will be constrained within the range 0 per cent. to 1·5 per cent.
As my right hon. Friend made clear, restraint in current expenditure, of which pay forms so large a part, is a necessary condition of our ability to direct resources at areas of spending which should rightly have priority, including spending on capital projects. Only by exercising restraint on current expenditure can the inescapable pressures elsewhere in spending programmes be accommodated, and capital spending in particular be given the emphasis widely urged, while keeping to our published plans for public spending as a whole. Those plans form part of a coherent and responsible fiscal and economic strategy, and they were debated and endorsed by the House last week.

Mr. Archy Kirkwood: Can the right hon. Gentleman tell the House what amount will be saved to the Treasury if the motion is passed?

Mr. Newton: The hon. Gentleman will be well aware that the sum involved is small. For reasons that I shall touch on, our recommendation is important.

Dame Elaine Kellett-Bowman: Was that not a remarkably trivial intervention from the Liberal Benches? It is the principle that is at stake and not the actual cash.

Mr. Newton: I am grateful to my hon. Friend. It is clear that we believe that it is right—I sense that she believes so too—for the Government and the House to give a lead in exercising restraint. I am grateful to the many hon. Members who have indicated their support for that view by signing early-day motion 834.

Mr. Joseph Ashton: Is the right hon. Gentleman aware that I would support him and vote for the motion if he could guarantee that the cash which should have gone to my pay rise would go to Oxfam or the National Society for the Prevention of Cruelty to Children and not to the Treasury. If not, I shall vote against it.

Mr. Newton: I am grateful to the hon. Gentleman for what he said in the first half of his intervention. The Government have looked at what could be spent in certain areas of public expenditure, including those to which the hon. Gentleman referred, and we felt that it was right to ask for the exercise of restraint on forms of current expenditure, including the pay that is under debate. In that sense, it could be said that that request is part of a range of decisions that have enabled more money to be spent in ways that the hon. Gentleman might prefer.
Hon. Members would expect me to say something about the Government's view of what should happen in future years. It has become clear that, in any event, a new resolution would be likely to have been needed because of the substantial changes that have taken place in the structure of civil service pay arrangements with the move to a much greater emphasis on performance-related pay.
The existing resolution defines Members pay in terms of
89% of the rate which on I January in that year represents the maximum point on the main national pay scale for Grade 6 officers in the Home Civil Service, or if that scale ceases to exist, on the scale which for the time being replaces it (disregarding, in either case, any discretionary pay point on that scale)".
The last point, which is in parenthesis, is particularly important in this context because, by comparison with the previous structure, which provided a scale maximum and a higher range maximum—access to which was discretionary and performance related—the new structure, which has been in place since last August, no longer has a scale maximum, but a pay range defined by minimum and maximum points, with no fixed points in between. Individuals' pay within that range depends entirely on annual assessments of performance. In other words, in relation to the resolution passed by the House in 1987, the word "maximum" has, in effect, changed its meaning—having previously specifically excluded performance-related payments, it now includes such payments, and at the highest possible level.
In those circumstances, there appear to be two possible interpretations of the existing resolution. One is that it has simply become inoperable, with the result that it would provide no power for Members to have any pay at all, let alone an increase. The other is that its references to excluding performance-related pay should be ignored. That would produce an increase of more than 20 per cent. While there can be little doubt which interpretation the House would have preferred, I think there will be few who


would wish to argue that that would have been an appropriate outcome, against the current economic background.
In the light of this, and the fact that, in any event, we cannot know how any civil service pay settlement next year will affect the performance element of the new structure —that structure is in a state of transition itself—the Government's clear recommendation to the House is that it would be neither practical nor right to seek to decide, now, the precise terms for future linkage. That is why the resolution deals only with 1993. We should return to the position for 1994 and beyond towards the end of next year when the position is clearer. I can, however, give the House two clear assurances.
First, the Government entirely accept the case for re-establishing a clear and automatic linkage with the civil service, comparable with what the House intended when it passed the existing resolution. We have no wish to return to the situation in which the House has to decide on Members' pay each and every year. Rightly, that is, I think, a very important point for the House
.
Secondly, we do not intend that Members should forgo the pay increase which civil servants already have—the 3·9 per cent. for 1992 paid in August, which would, in normal circumstances, have been expected to carry through to Members pay in January—as well as have no increase in respect of the forthcoming year. In other words, we do not intend that Members should be permanently disadvantaged by 3·9 per cent. in comparison with the civil service.
I turn lastly to pensions, about which I am aware that some concern has been expressed, and which are indeed the subject of an amendment by the right hon. Member for Manchester, Wythenshawe (Mr. Morris), to whom I shall of course listen with care.
Before making some comment on that, however, I should first make it quite clear that the motion before the House has no effect whatever on pensions already in payment. Those pensions, and the arrangements for increasing them, remain precisely as they are. Parliamentary pensions in payment, like other pensions with the same uprating formula, will increase by 3·6 per cent. from April 1993, as announced by my right lion. Friend the Secretary of State for Social Security in his uprating statement two weeks ago.
However, I recognise, of course, that the amendment is directed at a different point, which is the effect on future pensions of the proposed restraint on pay. As I have said, I shall listen to the right hon. Gentleman with care, not least because I note that his proposal does not go down the path of seeking to draw a contribution from the taxpayer, which would not be available to other groups affected by restraint, in respect of payments related to a notional salary. It provides rather for Members to be able to make additional payments entirely at their own expense, to offset the effects of restraint. Perhaps though, I might make two observations which he, the House and other Members of the fund who have put their names to his amendment may wish to bear in mind.
First, since the parliamentary pension scheme is a defined benefit scheme—that is to say, benefits are based on the salary payable at the time of retirement—and since the longer-term position will not become clear until the House has debated and decided it at a later stage, hon. Members would not find it at all easy to determine whether and to what extent they wished to take advantage of what is proposed in the amendment, without some risk of

making payments which brought them no benefit. Secondly, taking account of that, it could be better to examine the alternative possibility of building on the general provisions introduced by the Government for additional voluntary contributions in pension schemes generally.
There are two ways in which that can be done. There is what is called in the occupational pension trade a free-standing additional voluntary contribution—that is, paying such contributions, which are tax-relieved within the Inland Revenue limits, to one of the many schemes available commercially. Secondly, there are AVC schemes which are provided through the occupational pension scheme, in this case the parliamentary scheme, which have advantages in simplifying administration and keeping costs down.
Should the trustees, or Members generally, feel that it would be helpful in the spirit of the amendment to explore the other possibilities more fully, I want to make it clear that I would be happy to assist. I hope that that is a constructive thought for the House and for the right hon. Gentleman. In ending with that thought, I commend the main motion to the House.

Mrs. Margaret Beckett: The debate is a matter for the House of Commons as a body and for Members to make their decision on a free vote. For that reason, it is essential that, in the fairly short time allowed to us, as many hon. Members as possible should have a chance to speak. Accordingly, I shall seek to curtail my remarks.
What we are debating is not a small part of a coherent policy for pay, not even in the public sector. Like most matters to which the Government set their hand, it is a mess. Nor is the specific proposal as it relates to Members of Parliament a policy even for our pay. It is not a policy; it is a smokescreen. The Government have announced a wholly arbitrary limit for public sector pay and they hope, by including Members of Parliament in its provisions, to create an illusion of fairness and the impression that the highest paid are taking their fair share of a concept that is usually completely absent from their thinking or policy.
The highest-paid, even in the public sector, will not be affected by the proposal. Next year, the senior ranks of the civil service, judges and so on will, I understand, receive. more than Members of Parliament and more than the 1·5 per cent. which is supposed to be the general limit. We on these Benches object to the proposals for public sector pay.
During the election campaign some six months ago, the Conservative party, from the Prime Minister down, swore to the people that, because our economy was fundamentally sound, cuts in income tax could be afforded, as well as increases in public spending and improvements in public services, and that no cost-cutting measures and no revenue-raising measures, such as increases in other taxes or charges, would be needed.

Mr. Rod Richards: The hon. Lady has just said that there should not be a limit on public sector pay. Is that correct, or does she believe that there should be a limit—in which case, what does she think that limit should be?

Mrs. Beckett: There should be a proper and fair—seen to be fair—policy for working out public sector pay along


the lines of the pay review bodies and other existing bodies. That is the Labour party's policy. Did the Conservative party manifesto tell people in the public sector what the Government's policy would be?
Now that the election is over, the Conservative party claims, as the hon. Member for Clwyd, North-West (Mr. Richards) just did, that public spending plans can be preserved only at the expense of pay levels and jobs in the public sector. For a married public sector worker on £10,000 a year, even an increase of 1·5 per cent. is equivalent to a reduction in income, equivalent to an increase in the basic rate of tax of 7p in the pound. So much for the argument that income tax cuts could be afforded and that there would be no penalty after the election.
Let there he no mistake: the Government's overall proposals will mean not pay cuts to save jobs, but pay cuts and job losses. It is no accident that the proposal for Members' salaries is not for a 1·5 per cent. increase—as many hon. Members thought after the first publicity—in place of the increase in payment from last August for the civil service grade with which our pay is linked, but for a pay freeze. A freeze is exactly what the Government's proposals imply for many low-paid workers in the public sector.
Local authorities have costed the effects on their pay bill of pay awards for the police, the fire service, the teaching profession and other services, already made and in payment. The combined effect of those existing awards and other employment costs leaves local authorities some £200 million short of the money that they already need to meet next year's pay bill—that is without an increase under the formula. With universal capping of expenditure, job and service cuts are likely to have to be made to balance the books.
Moreover, we already know that, where incremental pay scales are in place, by law those increments must and will be paid. if funding is geared to 1·5 per cent. of the total bill, increments for some will mean a pay freeze for others. That is why Members of Parliament are to have a pay freeze. If we had been given 1·5 per cent. and it later emerged that many public sector workers were facing a pay freeze, the Government would rightly be accused of sleight of hand on their own pay.
That is why I cannot support the Government motion tonight. Members of Parliament are being used not to set an example but as a stalking horse. It is not only in the matter of a freeze that I fear that we are being used to help set a precedent that I deplore. By moving the motion, the Government are breaking, at least temporarily, a linkage with a particular civil service grade. The House has voted for the principle of a linkage on no less than three occasions—a vote and a principle which the Government finally and reluctantly accepted.
Opposition Members are well aware that the history of the Government's term of office shows that there is nothing that they would like better than to break every pay formula and linkage, and to dissolve every pay review body and every independent and fair system of pay assessment in the public and private sectors. They would love to move away from any form of national pay bargaining or concept of a rate for the job. They tried repeatedly to persuade pay review bodies for nurses,

doctors and dentists to abandon national pay bargaining. They tried to break the pay formulae for the police and the fire service. The motion is all part of the same approach.

Mr. Nigel Evans: Will the hon. Lady try to persuade Labour-controlled local authorities to comply with the pay restraint, or will she encourage them to make whatever pay deals they care to arrange?

Mrs. Beckett: Either the hon. Gentleman was not listening or he did not understand the purport of what he heard. Local authorities are already underfunded for the pay settlements that have already been awarded and are now in payment. They will have a horrendously difficult job—[Interruption.]What is the hon. Gentleman's message and that of his Government? The Government are cheating local authorities on the funding that they have already given for the pay settlements to which they have agreed. Local authorities will have a horrendous job, and I do not propose to try to second-guess them in their difficulties.
The Government would love to break all pay formulae and abandon all pay review bodies. Most recently, in a move which I presume, from his remarks, the hon. Member for Ribble Valley (Mr. Evans) will not support, the Government are moving towards abolishing even the wages councils, the only protection still available to 2 million low-paid women in work.
At the outset, I reminded hon. Members that this was a matter for the House and individual Members. Each hon. Member has a duty to make up his or her mind—[Interruption.]Hon. Members have a duty to take account of the overall income and circumstances of their household.

Mrs. Elaine Kellett-Bowman: I presume that the hon. Lady is doing that for hers.

Mrs. Beckett: I most certainly am, and my husband does not earn the salaries paid in the European Parliament.
Each of us has a duty to make up his or her mind on the matter. I presume that press reports that Conservative Members are on a two-line Whip are mistaken, as this is clearly a matter for the House. As it is a matter for individuals, I hope that all hon. Members will consider their individual responsibility.
I deplore and oppose the Government's policy, so I shall not vote for their motion. But I do not seek a special privilege for hon. Members which I cannot secure for other, often low-paid, public sector workers. Consequently, I cannot and shall not vote against the Government motion that we should be treated as others will be treated, and I shall not vote on the main amendment.
However, I have observed that many Conservative Members, including the hon. Member for Ribble Valley, who I believe is a member of Lloyd's, have signed an early-day motion supporting Government policy, something which the Minister understandably applauded in his speech.
It is an unfortunate coincidence that the Government have found it necessary to stage this debate just before —I believe only days before—the setting up of a Select Committee on Members' Interests. We lack up-to-date information on the other earnings, fees or emoluments of Conservative Members. If they are new Members, like the


hon. Member for Ribble Valley, we lack any information at all about their personal financial circumstances. It must therefore be a matter of personal honour. As Madam Speaker said before she left the Chair, no honourable Member should speak or vote in this debate to support a pay freeze for others—

Mr. Terry Dicks: On a point of order, Madam Deputy Speaker. There is a wonderful smell of cooking coming from underneath the Benches. I do not know whether we now have to cook our own meals as well as listen to debates, but can you help by arranging for whoever is cooking to stop, because the smell of eggs, bacon and fried bread is rather appetising?

Madam Deputy Speaker (Dame Janet Fookes): I am not sure that that matter falls within my competence, but I can certainly ensure that the message is relayed.

Mrs. Beckett: I hope that no hon. Member will speak or vote in this debate to support a pay freeze for others without declaring in full the extent to which they depend on the salary which they intend to freeze.
Among the Tory Back Benchers who signed the early-day motion to which the Lord President referred are more than 50 who have declared interests, but there are many new Members of whom we know nothing. Between them, the 50 share more than 120 directorships and consultancies. Some Back-Bench Conservative Members are fortunate enough to have inherited wealth and others —all credit to them—have made money. But we should be spared the lectures about our duty to set an example on such matters from those who have the means to evade the difficulties.

Mr. Bryan Davies: A reference to the Tory Whips Office might be helpful. Does my hon. Friend remember that, before the last election, the Whips were busy distributing largesse to their colleagues in the form of consultancies so that they could sustain themselves in the manner to which they appear to be accustomed?

Mrs. Beckett: I shall not be drawn further on that matter.
I do not know whether the Lord President of the Council intends to speak again, but one issue that is of concern to me and, I believe, the House became apparent when I looked into the background of today's debate. The right hon. Gentleman said that there had been a change in the arrangements of pay for the civil service grade with which Members' pay was previously linked, and that there was now a pay scale. I understand that the Treasury has refused to give the Fees Office any information about that pay scale. It has certainly refused to identify the point on the scale to which Members' pay might be linked.
Today, the Lord President did not even give us the minimum and the maximum of the pay scale to which Members' pay was previously linked; he merely said that the maximum would be far above our reach. It is important that we have any available information. The right hon. Gentleman referred to the relevant resolution, and some hon. Members may wish to look at the impact of the change on their pension contributions. It may be difficult for them to do so if they lack the basic information. The figure in the measure is based on the

average of 3·9 per cent. quoted for all public sector settlements. It does not necessarily bear any relationship to the grade to which Members' pay was linked.
I should be glad if the Lord President would clarify his further comments. We are talking about the consequences of last year's pay increase, and there is concern that, if civil service pay for the relevant grade is frozen for the year ahead, Members' pay might be frozen for two years. That is a source of particular anxiety to hon. Members who are nearing retirement, because of the impact on their pensions.
We deplore the Government's policy whereby cuts and savings will fall entirely arbitrarily across the public sector, affecting low-paid people in particular. We utterly reject the notion that what is happening to Members' pay should be used as a precedent to attack and undermine the position of other workers in the public sector. Above all, we reject the notion that the Government are saving jobs.
Jobs directly related to the public sector will be lost because the Government cheat on the funding, even of today's package. More generally, their pay policy is intended to remove £1·5 billion from the economy. It has been estimated that cutting current Government expenditure by £1·5 billion will mean that almost 90,000 jobs will be lost across the public and private sectors as demand in the economy is reduced. That is not even a coherent or consistent pay policy; it is an ill-thought-out shambles—gesture politics.
The only way in which the motion relates to the wider problems of the country and the economy is that it is one small part of the process whereby the Government demonstrate their incompetence, break their promises and betray the trust that so many have placed in them.

Dr. John G. Blackburn: This is essentially a domestic debate—it is our only forum in which to discuss our pay and conditions and, I note from the amendment in the name of the right hon. Member for Manchester, Wythenshawe (Mr. Morris), pensions.. Although it is largely a private debate on the dealings of the House, I am delighted that it is open to public scrutiny.
I shall speak of a subject that, during my years in the House, I have never heard voiced. If my proposition is accepted, it will mean a reduction not in hon. Members' pay but in their disposable income. Today I am compelled to outline a policy that I pray will receive the constructive support of all hon. Members. It relates to the death of a Member in the service of the House.
I remember, as will other hon. Members, Sir Anthony Berry, who was killed in the Grand hotel by an IRA bomb, and William Roberts, who all but died at the Dispatch Box as he addressed the House. Liberal Members, like everyone else, mourn the tragic Saturday morning when David Penhaligon suffered a fatal and horrific car crash. We also remember John Spence and Eric Heifer, who were loved by all hon. Members.
I see that the leader of the Ulster Unionists is present. The House mourned when Rev. Robert Bradford was shot dead in church while conducting his surgery as a Member of Parliament. We remember Donald Coleman, Spencer Le Marchant and a man whose spirit still pervades the place, Sir John Stradling Thomas, who was loved by all.
What is the response of the House towards the death of hon. Members in such circumstances? I do not think that


the response is very good—and I say that as an hon. Member. Even worse, we treat the death of our colleagues in an off-hand way. We perhaps think about them for a short period, then dismiss them from our memories.
I am open to correction, and shall give my interpretation of how we treat the death of other hon. Members—I am not talking about using funds from the Chancellor's purse. We do so by perhaps writing to the family, or attending funerals and memorial services at which we pay tribute. Seldom, if ever, are we asked to exercise benevolence to the bereaved families—I have never been asked.
Every day for the past 40 years I have read a book which describes the gifts and states:
the greatest of these is charity".
I want the House to share and support my vision of benevolence. When a Member dies in the service of the House, we should be corporately invited to authorise the Fees Office in writing to deduct £20 at source from Members' salaries. In that way, we would exercise charity to the families of dead Members of the House, in the form of a sum of about £13,000. That is my proposition—and I believe that it could be done. It would be a practical expression of sympathy and affection for the family of a colleague who had served in the House.
I am conscious that I will not receive a positive response from Opposition Front-Bench spokesmen or from Ministers, but I am entitled to my vision. I intend to sow the seed of an idea this evening. I hope that the Leader of the House will consider it and that it will be discussed—to use the mystic expression—through the usual channels. I shall not lay down my sword on this issue. I believe that we should exercise this benevolence, within the community of the House of Commons, for the benefit of the widows and children left behind by Members who die in the service of the House.

Mr. Alfred Morris: I beg to move, as an amendment to the Motion, at the end to add
'and that the Leader of the House should make regulations to provide that any pension which may become payable to or in respect of any Member of this House under the Parliamentary and other Pensions Act 1987 should be calculated as if—

The salary specified in paragraph (a) were £32,057; and
The salary specified in paragraph (b) were £24,132;
if that Member pays supplementary voluntary contributions in 1993 of an amount which in the opinion of the Government Actuary is the average amount necessary to meet the full additional cost of the pensions so enhanced.'
The amendment is tabled, as the House will have noted, in the names of all the managing trustees of the parliamentary contributory pension fund. Our purpose is to give Members the opportunity to make an extra contribution to the fund, so that any pension benefits payable either to them or to their dependants, if they leave the House during the period 1 January 1993 to 31 December 1994, will be calculated by reference to the notional salary of £32,057. The amendment will also help widows and other dependants of Members who die between those dates.
With regard to the first substantive point made by the Leader of the House—about the parliamentary scheme,

being a defined benefit scheme—the amendment provides an option for Members to ensure that they or their widows and other dependants are not penalised if their service ends at any time in the period between 1 January 1993 and 31 December 1994. This is an insurance against that contingency which it will be for each Member to decide in his or her case. Our submission is that they should not be denied that choice.
As for the second point that the right hon. Gentleman put to me this afternoon, it calls, in effect, for a separate and freestanding scheme for additional voluntary contributions—AVCs. While the right hon. Gentleman may argue that this would be desirable, I believe that our existing parliamentary scheme should itself provide all reasonable facilities for the protection of its members and their dependants. That is the basic rationale of, and justification for, the amendment before the House. In my view, all benefits should be integral to the scheme itself.

Sir Peter Hordern: I should just like to be certain about the right hon. Gentleman's point on additional voluntary contributions. Is he as clear as I am that it would be perfectly proper for the existing parliamentary scheme to take additional voluntary contributions, as that was the point that I think my right hon. Friend was making? If so, it is the most desirable outcome that we could hope to achieve.

Mr. Morris: I am grateful to the hon. Gentleman. My advice is that we need a separate and free-standing scheme to provide AVCs—that it would not be possible to make that provision within the parliamentary scheme as it stands, and that new regulations would be required.
It might assist right hon. and hon. Members for me now to explain how the calculation of salary for pension purposes is made. Benefits are based on the amount of gross salary due to a Member during his or her last year of service. For example, if a Member left the House on 30 June 1993, his or her salary for pension purposes would be the amount of gross salary due for the period 1 July 1992 to 30 June 1993. Thus, the calculation of the pension or any other pension benefits would be based on the salary of £31,455·50, rather than the current salary of £30,854. My hon. Friend the Member for Derby, South (Mrs. Beckett) fully understood that point.
The lump sum payable in the event of the death of a current Member is twice the Member's annual salary. Members will note that this figure will be higher if the notional salary of £32,057 is used in the calculation. I must also point out that, under our nomination procedures, this payment is often made directly to the widow or widower and without the need for grant of probate. Thus, financial help can be made available fairly quickly at a most difficult time for the bereaved family. Any widow's, widower's or children's pensions calculated by reference to the notional salary of £32,057 will also be higher.
I must emphasise that the cost of this facility will not fall on the public purse, in that Members who wish to avail themselves of it will bear the full actuarially calculated cost themselves. Speaking as chairman of the managing trustees and on behalf of all my colleagues, I am sure that all Members will agree that this is a reasonable proposition for the House to consider.
The fate of the Government's proposal to the House will be decided in the Division Lobbies this evening by Members themselves; but we must recognise that the


interests of widows and other dependants will also be affected by the proposals, and according to whether our amendment is accepted or rejected. Although their entitlements to benefit are clearly at stake, they cannot directly affect the outcome of the debate, and the managing trustees seek, by means of their amendment, to protect their interests.

Mr. Ashton: Can my right hon. Friend give me any quick, rule-of-thumb figures for the effect of the amendment not being carried on, say, a Member who spent 10 years in retirement drawing his pension, who was outlived by his wife by five years—women tend to marry younger and live longer—and who I believe might forfeit about £10,000 if this settlement is not agreed to?

Mr. Morris: There can be no definitive answer to that; it would depend on the last year's salary of the Member who had died or had to leave the House because of ill health. Our essential point is that Members and their dependants will be at risk, as between 1 January 1993 and 31 November 1994, unless we provide the opportunity for insurance that the amendment offers.
My hon. Friend the Member for Bassetlaw (Mr. Ashton) is right to say that we should not limit our consideration of the amendment to the immediate future. The pension is based on the final year's salary of the individual Member who dies or for some other reason is no longer in the service of the House. We have heard this afternoon of Members who have died in circumstances of some hardship, and we have heard a proposal for helping them further by voluntary means. As my hon. Friend fears, the effect of not carrying the amendment could be long-term.
I hope that the House will agree that the amendment is a safeguard that we have a duty to provide. The additional cost if the option is used, will be voluntary. The amendment is aimed solely at protecting Members and their dependents who, because of ill health or death in service, end their service to the House between 1 January 1993 and 31 December 1994.

Sir Jim Spicer: I shall speak in favour of the amendment. Before I do so, I welcome the assurance given by my right hon. Friend the Leader of the House that we shall reconsider linkage before the end of 1993. I am sure that no hon. Member wants to return to what I would term the obscene practice of voting on our own salary, and inevitably coming face to face with media criticism every year. That was an invidious procedure for everyone. I am delighted that my right hon. Friend clarified the matter.
I am a relatively new trustee, and I wish to pay tribute to the chairman of the managing trustees of the parliamentary contributory pension scheme, the right hon. Member for Manchester, Wythenshawe (Mr. Morris), for the way in which he conducts our affairs. I am currently on a learning curve, but I support what he has said about the situation that could apply between 1 January 1993 and the end of 1994.
Perhaps it is morbid to dwell on the subject, but I am told that, in an average year, 12 Members will leave the House in one way or another. We have now been sitting for about five or six months in this Session and we are way behind our quota for the year. It would be intolerable if, between now and the end of 1994, a Member were

disadvantaged financially, as a result of death or retirement, in terms of the grant paid at the end of his or her period of service. A widow's rights for the rest of her life and the ex-Member's retirement life should come within the same category.
The amendment is well based and deserves support. My right hon. Friend the Leader of the House should consider it a bird in the hand. He said that there might be further discussions, but it seems that the amendment sets out the way forward. It is something tangible, and I urge all right hon. and hon. Members to support it.

Mr. Archy Kirkwood: Like the hon. Member for Dorset, West (Sir J. Spicer), I shall declare an interest. I too am a new pension fund trustee. Again taking up the remarks of the hon. Gentleman, I commend the chairman of the trustees, the right hon. Member for Manchester, Wythenshawe (Mr. Morris), on his work.
I hope that the House will consider the amendment with sympathy. It relates to the impact that the motion will have on the pension fund, the beneficiaries and others. It should be understood that the motion will have effect over a two-year period, all the way through to 31 December 1994, if it is accepted as it stands.
It is not impossible, for example, that there will be a general election between now and 31 December 1994. If that were to happen, the severance pay of any Member on leaving the House because of retirement or defeat at the polls would be affected. There would be some impact on the amount of money that he or she would be able to claim under the current schemes. If we make any changes, we should do so only after a great deal of careful consideration. Right hon. and hon. Members should understand the importance of—

Dr. Godman: Have the trustees received any representations from representatives of Members of the European Parliament on these matters? It seems that we have before us a curious form of the application of subsidiarity. It appears that the House is determining the pension rights of MEPs, their widows—God forgive me for saying so—and their widowers. It is a most curious form of the application of subsidiarity if MEPs have not been involved in the discussions.

Mr. Kirkwood: I am sure that those who occupy the: Government Front Bench have heard the point made so succinctly by the hon. Gentleman. I am not aware of any representations coming to the Committee that deals with the trustees of the pension fund. If any representations were made, they should have been made directly by MEPs to the Government.

Mr. Dicks: The hon. Gentleman said that there would be a freeze for two years. I was under the impression, wrongly, that it was for one year. Perhaps he will explain.

Mr. Kirkwood: I knew that I should not have become involved in this. I am a new trustee. Calculations for severance pay are based on the two years of previous service. Until 31 December 1994, the calculation will take into account the period of the freeze that we are discussing in the light of the motion.
I have taken some advice—I did not just make up what I said—and I believe that I am right. The effect would not


be great, but there would be an impact on severance pay. It seems that the hon. Member for Hayes and Harlington (Mr. Dicks) is already contemplating defeat at the next general election, and perhaps before 31 December 1994. He should not worry too much, because, if this Parliament lasts until then, the effect will not be great.
I have one or two additional—

Mr. Dicks: Will the hon. Gentleman give way?

Mr. Kirkwood: I am not the best person to deal with these matters.
I have one or two further comments to make on the substantive motion. First, like everyone else, I am extremely nervous about breaking the link. Any breakage of the linkage that we have established would be unfortunate. I understood the Leader of the House to say that he was not really breaking the link, because he was holding fast to the principle. He said, in effect, that he was uncoupling it for 12 months.
I do not understand why the Government did not say, "We shall have a 1·5 per cent. increase just like everyone else." How did a freeze suddenly emerge? The small print in the autumn statement suggested that we were facing a 1·5 per cent. increase as a matter of pay restraint. I can understand that, but I do not understand—the Leader of the House will help me a great deal if he will explain—why we have moved from that restraint to a full-blown freeze.
When I intervened in the speech of the Leader of the House, he made it clear that not much money would be saved. That must be so. It seems that we are talking about saving £1,000 per Member under the terms of the substantive motion. That is about £700,000-worth of public expenditure. That is a flea-bite when set against public expenditure totals. The Government could look at many other areas, such as Ministers' country houses, if they want to save money on that scale.
I am a new member of the Liaison Committee which is working out how to spend £500,000 or £600,000 of taxpayers' money to inform Select Committees by sending Members abroad. I am in favour of travelling abroad, especially in relation to some of the reports about Europe. It is entirely reasonable for members of Select Committees involved in the study of detailed subjects to be able to travel when absolutely necessary. However, members of the Select Committees on Trade and Industry, on Home Affairs and on Defence travel to Washington and such places. A great deal of money could be saved there.
The hon. Member for Bassetlaw (Mr. Ashton) raised an important matter when he asked what was to happen to the money. The answer given by the Leader of the House was unconvincing—it seems that it will return to the maw of the Treasury. Some of it may find its way to the Bosnian refugees or Somalia or to the miners' benevolent fund, and perhaps some of it will be used to supply arms to Saddam Hussein. The motion is a mere gesture and it would be far more effective to earmark the money. I thought that the hon. Member for Dudley, West (Dr. Blackburn) would have suggested putting the £1,000 per head into the Members' benevolent fund. That commends itself much more to me than allowing money to flow back to the Treasury.
The hon. Member for Derby, South (Mrs. Beckett) spoke persuasively about the Government setting an

example by freezing our pay. I shall listen carefully to the Leader of the House. If he is to gain my vote, he will have to guarantee that such freezing will not be used as a precedent in the formation of Government policy on public sector pay. It would be easy for the Government and the Chancellor to say that a pay freeze at Westminster is biting the bullet and that public sector employees will have to accept the same medicine. If that is in the Government's mind, it is iniquitous. If it is not their thinking, the Leader of the House should say so clearly in winding up.

Mr. David Nicholson: Like many other hon. Members, I have not been present for most of the debate because of other commitments. The hon. Gentleman raises important matters and, in coal industry terms, he is on what would be regarded as a good seam. What precedents are being established in the debate and what will be the link with civil service pay? It would be unsatisfactory for the House to decide Members' pay every year. Members' pay should be linked to a group in the civil service, although I entirely accept that the present group may be in the process of being phased out and that we will have to look at the arrangements again. The freeze should be temporary and we should look at these matters again soon so that we can quickly establish an automatic link.

Mr. Kirkwood: I think that in future I shall adopt the hon. Gentleman's technique of arriving late and making a speech without being called. I entirely support the thrust of his comments, but he may not have had the benefit of hearing the Leader of the House at the beginning of the debate.
This is a complicated matter, and some hon. Members are uncertain about precisely what is to happen. The motion states that, from 1 January 1993, pay will be frozen. I understood the Leader of the House to say that he intended to cling to the principle of establishing a link. I am not clear about what is to happen in 1993 to produce a pay level for 1 January 1994. The right hon. Gentleman seemed to suggest that the reference group was no longer suitable for calculating pay. However, he did not outline the consequences that flow from that or how he would cope. Will he review the method of assessing Members' pay? If he does, he will he turning over ground that has already been ploughed by the Top Salaries Review Body, which studied all the comparators at great length.
The Leader of the House is aware of the pay of Senators and Congressmen in the United States of America and the pay of public representatives in France, Germany or even Italy, who all receive substantially more than we do. I hope that he will look at all these matters afresh, give them the fullest consideration and take evidence and publish reports rather than picking a figure out of the air.
The reference group that the Leader of the House mentioned may be subject to a 1·5 per cent. pay freeze, which may be increased or reduced. As Opposition Members have said, we do not even know the reference points in the civil service group. The right hon. Gentleman's only positive statement was that we would not lose twice. As far as it goes, that is reassuring; but does it mean that, if the average restraint is 1·5 per cent. in the calendar year commencing 1 January 1993, we can expect to lose the 3·9 per cent. civil service pay award that has already been made? The only way to make up that ground is by increasing our salaries by 5·4 per cent. from 1 January


next year. The Leader of the House will have to answer that question in specific terms before he can be confident that people will understand the full implications of the Government motion.
I suspect that there has been some gesture politics by the Government, and that is no substitute for an effective economic policy. Since 1979, the Government have had a £100 billion windfall in oil and gas revenues and have received £60 billion from privatisation. They are in a sorry mess if their only effective action on the economy is to freeze Members' pay.
I am much less concerned about rates of pay than about House facilities to enable hon. Members to do the job for which we were elected. That has been a hobby horse of mine since I was elected in 1983. The people whom we scrutinise in the civil service and elsewhere have the benefit of access to high-tech equipment. The sooner that the Leader of the House and the House authorities start to provide such facilities for Members to do their job effectively, the better it will be for us all. I hope that the Leader of the House will try to answer some of my questions, especially the one about what is to happen after 1 January 1994.

Mr. Nigel Evans: Much has been said about Members' pay since it was first granted in 1911, which was a little before my time, and I am sure that much more will be said about it in future. It is an emotive subject that is often clouded by Opposition Members who are far more interested in the incomes of Conservative Members than those of hon. Members generally. That typifies socialist thinking—if that is not a contradiction in terms —and flies in the face of a common acceptance over the years, as stated in the 1983 Top Salaries Review Body report, that hon. Members should not be driven to take on additional paid employment simply because of financial pressures. For their own reasons, many hon. Members take additional paid employment. Some Opposition Members have a fixation, driven by dogma and stirred by envy, that levelling is the name of the game. As usual, the levelling is downwards.
As the Leader of the House said, there is a problem with the current pay settlement, because a productivity element is being introduced into civil service remuneration. It has been suggested that that should apply to the pay of hon. Members.

Mr. Dicks: I hope that my hon. Friend will point out that civil servants receive both a non-contributory pension and a lump-sum gratuity when they retire. The Government never took that into account when Members' pay was linked to that of civil servants and we received 89 per cent. of grade 6 pay.

Mr. Evans: My hon. Friend has made his point admirably, but I was going to make another point, in connection with performance-related pay. Who would judge the performance of Members of Parliament? I think that the electors would be the best judges: given that they supported the Conservatives in 1979, 1983, 1987 and 1992, and will do so again at the next general election, Conservative Members should feel quite safe about being paid according to performance—although I would feel extremely concerned about the prospect were I an Opposition Member.
The debate, however, is not about the remuneration of Members of Parliament in general; it is about their remuneration during a period of pay restraint. This year, I voted—along with some Conservative Members and most Opposition Members—for an increase in office cost allowances. That was not a particularly popular move, but I felt that it had to be made. As has been said, Members of Parliament need to have the tools for the job, and those tools are very expensive—especially for new Members, who incur the start-off costs of all the new equipment that they must acquire. Pay, however, is an entirely different matter; I do not think that Members' pay should be differentiated from that of other people.
My constituency has one of the lowest unemployment rates in the country, but I cannot be complacent. This week one of our major cement companies, Castle Cement, announced 70 redundancies. Other job losses, short working, pay freezes and—in certain circumstances, in the private sector—pay reductions have been commonplace for the past two years, and have become more so as the world recession has gripped. How would it look to the country at large if we, as a group, voted ourselves a pay rise while others suffered pay cuts? We should look worse than pickpockets, taking from others and hoping that they were looking the other way. The public, however, are not looking the other way; they are looking at the House.
I believe that the autumn statement was imaginative, realistic and a boost to confidence. It sent the nation a determined message that all possible measures would be taken to speed our journey to recovery. The public sector, which has enjoyed a real improvement in living standards since 1979, has been asked to restrict wage rises to 1·5 per cent. this year. That will help to ensure that resources are available for the capital projects that we have all pressed the Government to continue; it will also allow social security uprating, which the House will applaud.
This debate is not about gesture politics; it is about sending the public a message about the need for restraint on the part of the public sector, Members of Parliament and the private sector. The private sector has taken the brunt of the knocks from the recession: frozen pay is no stranger to companies whose profits have slumped and whose markets have shrunk. In a recent speech, my right hon. Friend the Prime Minister asked for pay restraint in the boardroom as well as in the toolroom. I echo those sentiments, along with the message that has been sent to the captains of our newly privatised companies and, of course, to the rest of us: there can be no conscientious objectors in the fight against recession.
Too many bosses of late have been grabbing double-figure pay increases. Some water bosses seem oblivious to what is happening around them. While other workers are forced to forgo their jobs, let alone pay increases, water bosses have been heaping riches on themselves. They should hand those riches back.

Mr. Derek Fatchett: The hon. Gentleman has raised an interesting point. May I draw his attention to the behaviour of the chairman of Yorkshire Water, who has just taken a substantial pay increase? I wonder what advice the hon. Gentleman would offer his hon. Friend the Member for Pudsey (Sir G. Shaw), who is a paid director of Yorkshire Water—that constitutes part of his outside earnings. Would he advise his hon. Friend to tell the Yorkshire Water chairman not to take a pay increase at all?

Mr. Evans: According to figures that I have before me, the Yorkshire Water boss received a 40 per cent. pay rise this year. I shall comment on that but I shall leave it to hon. Members to decide what they ought to do with their own incomes.
As I have said, there should be no conscientious objectors in the battle against the recession, whether the battle is fought in the boardroom or in the toolroom. When the foot soldiers are in the firing line, the captains can be found in the mess swigging down the brandy and stuffing their pockets with cigars; but everyone must make a sacrifice for the country, and the sight of some top people raiding the war chest is certainly an unpalatable one. I hope that shareholders, in Yorkshire and elsewhere, will take note of that.

Mr. Fatchett: The hon. Gentleman seems to have missed the essential point. What advice will he give his hon. Friend the Member for Pudsey, who is a director of Yorkshire Water?

Mr. Evans: I have already responded to that question. As I have said, such companies have shareholders, and I hope that they will note exactly what bosses and others are being paid. I repeat that there can be no conscientious objectors.
In 1983, the Top Salaries Review Body stated that it would damage the national interest if the salary of Members of Parliament was allowed to remain too far below the levels available to able men and women in other walks of life. The current national average pay for men is about £340 a week—I realise, of course, that averages take extremities into account. Clearly, Members of Parliament do worse than some people, but we do a great deal better than others. My real reward will come in heaven; but I fully understand why some Opposition Members may prefer to receive their rewards now, on earth.
It is rumoured that some hon. Members will want to show solidarity with public-sector workers by abstaining this evening, or sitting on their hands. That, however, is hardly the response for which the public sector will look. The way in which to show support for both public and private sectors—the way in which to send clear messages to boardroom bosses and industrial leaders—is to vote for a pay freeze, and to support the Government's economic recovery package.

Mr. Doug Hoyle: The House will not be surprised to learn that I do not intend to follow too closely the rather naive speech of the hon. Member for Ribble Valley (Mr. Evans). Let me make one point about it, however. The hon. Gentleman described Opposition Members' criticism of moonlighters as the politics of envy; but did he not engage in the politics of envy when he—rightly, in my view—criticised company directors who had accepted huge pay increases? It does not quite add up.

Mr. Nigel Evans: I was asking for pay restraint in all sectors—public and private, boardroom and toolroom—in the next pay round, irrespective of current earnings. We should note, however, that the 49 companies that have been privatised since 1979 now earn the country £2 billion in taxation, year in, year out. Before they were privatised, they cost the Exchequer £50 million a week.

Madam Deputy Speaker: Order. Each intervention has tended to be longer than the last. Sadly, long interventions are not the prerogative of either side of the House.

Mr. Hoyle: As a matter of fact, I was finding the hon. Gentleman's reply quite interesting. I take it from what he said that he will tell his hon. Friends who hold directorships and consultancies not to accept pay increases in the coming year.

Mr. Nigel Evans: Yes.

Mr. Hoyle: Let me make it clear where I stand. I am totally opposed to pay freezes, so I shall vote against the Government motion. The pay freeze for the public sector will not make matters better. As my hon. Friend the Member for Derby, South (Mrs. Beckett) said, many people, because of the restrictions on local government, will lose their jobs. Far from improving things, the pay freeze will make matters worse. The restrictions on purchasing power will not lead to economic recovery. We shall be shoved deeper into recession.
We are linked to those in grade 6 who received their pay increase last August. We ought therefore, if there is any natural justice, to have got ours in August. It just so happens that our increase is due next January. We ought to be given that increase, for our pay is linked to grade 6. The Leader of the House was ambiguous. He referred to the link having been maintained. With whom is the link being maintained? It will be difficult to maintain that link, for the Leader of the House went on to say that those in grade 6 are to go on to performance-related pay. If Cabinet members were on performance-related pay, they would have to pay money to the Treasury for years to come. To whom, therefore, shall we be linked? Can the Leader of the House assure us that pay restraint will apply for only 12 months?

Mr. Andrew Robathan: What repayments were made by the Labour Government to the Treasury for their performance between 1974 and 1979?

Mr. Hoyle: That is a pathetic question. When we left office, the economy was in good shape. [Laughter.] I shall take the smile off the face of the man who hails taxis. When we left office, unemployment was very low and it was continuing to go down.

Dr. Godman: Will my hon. Friend give way?

Mr. Hoyle: More than 30 per cent. of manufacturing industry has been destroyed by the Government's economic policies since 1979.

Mr. Richards: Will the hon. Gentleman give way?

Mr. Hoyle: I shall not give way to any other hon. Members—

Dr. Godman: rose—

Mr. Hoyle: —because it is very unfair to my hon. Friends.

Dr. Godman: Will my hon. Friend give way?

Mr. Hoyle: I shall give way with pleasure to one of my hon. Friends.

Dr. Godman: Can I remind my hon. Friend that, in his motion, the Leader of the House appeals to my hon. Friend and to the rest of us to behave in a decent and


fair-minded way by refusing a pay increase? Does my hon. Friend agree that the Leader of the House could respond in a decent and fair-minded way by ensuring that the money saved is given to those non-governmental organisations that seek to help people in the developing world who at this moment are starving?

Mr. Hoyle: My hon. Friend makes a powerful point, which I hope the Leader of the House will take on board, though I doubt whether he will. My hon. Friend the Member for Bassetlaw (Mr. Ashton) asked a similar question, but he received no reply.

Mr. Richards: Will the hon. Gentleman give way?

Mr. Hoyle: No, I am afraid that I am not going to give way to the hon. Member.

Mr. Richards: He is afraid.

Mr. Hoyle: That's a laugh, isn't it? A Whitehall farce, if ever I heard one.
We are being used as a stalking horse to justify the public sector pay freeze—people who are among the lowest paid in the country. The Government want to be able to say, "Look, now that we've frozen MPs' pay, we expect you to restrict your pay demands." The Government are playing gesture politics. That is entirely unfair and will not work.
The Leader of the House said that he would listen carefully to what my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) had to say when he moved his amendment. I do not understand why the Leader of the House did not accept the amendment, particularly as my right hon. Friend said that it would be up to hon. Members to make supplementary voluntary contributions. Now that the Leader of the House has listened to my right hon. Friend's speech, I hope that he will say when he replies to the debate that he accepts the amendment.
To turn to the stench that is coming from the other side of the House and to the hypocrisy of those who signed early-day motion 834, it is difficult to get at the exact truth, for the new Register of Members' Interests will not be published until next January. However, only three of those who signed the early-day motion have no outside interests in the form of consultancies or directorships. All the others have, on average, four. I have informed all these hon. Members that I might refer to them, so I have complied with the conventions of the House.
The hon. Member for Slough (Mr. Watts) signed the motion. His directorships are Kenton and Middlesex building society and Global Satellite Communications (Scotland) plc. He has an office—John Watts and Co., Chartered Accountants. He is parliamentary adviser to the Institute of Actuaries and consultant to Rank Hovis McDougall and Wisdom Securities Ltd. There is one interest for which he might not be paid quite so much—as adviser to the Working Men's Club and Institute Union. That really is going down market, but he goes up market after that. He is also parliamentary adviser to the Institute of Chartered Accountants in England and Wales. By playing at gesture politics, I do not think that the hon. Gentleman will suffer too much.

Mr. David Winnick: He is too busy to be here.

Mr. Hoyle: Yes.
The hon. Member for Arundel (Sir M. Marshall) has 13 outside interests. He is the managing partner in Marshall Consultants and the chairman of Direct Business Satellite Systems. He is also a non-executive director of Integrated Information Technology Ltd. He is parliamentary adviser to British Aerospace—and, by God, it needs an adviser. He is also parliamentary adviser to Cable and Wireless, Comsat, Dynamic Engineering Inc., the Society of West End Theatres and Williams Holdings. Would you believe it, the hon. Gentleman is also a member of Lloyd's.

Mr. Patrick Nicholls: Will the hon. Gentleman give way?

Mr. Hoyle: No. I am sorry if this is upsetting the hon. Gentleman.
The hon. Member for Surrey, North-West (Sir M. Grylls) has a few nice little earners. He is a director of Le Carbone Lorraine, Stirling Winthrop, the Small Business Bureau and Cape plc, whatever that means. It may have South African connections, but I am not sure. The hon. Gentleman is consultant to Digital Equipment Company Ltd., the Association of Authorised Public Accountants, Bywater Group Ltd., the Unitary Tax Campaign, Humphreys and Glasgow Ltd., Harlingspear Ltd., Allied Partnership Group plc and Freight Complex Development and Management Ltd. One of his clients—he lists this because of questions that were asked in the Select Committee—is Ian Greer Associates.
I do not think that the right hon. Member for Chertsey and Walton (Sir G. Pattie) will feel the pinch. He signed the early-day motion. He has directorships with Nexus Marketing, Fairey Group, Leica plc, GEC Marconi and Carroll Group. He is a partner in Terrington Management, and he lists other clients. I do not think that he will go too short in 12 months.
I now refer to the hon. Member for Wirral, South (Mr. Porter). At least he has—[Interruption.]

Madam Deputy Speaker: Order. There is an increasing tendency for dialogue to take place between Conservative and Opposition Members, which is not acceptable.

Mr. Hoyle: I assure you, Madam Deputy Speaker, that it is not dialogue. Government Members are all directors and consultants of different companies. It is certainly not a dialogue. I am simply trying to make the point—

Madam Deputy Speaker: Order. I think perhaps the hon. Member misunderstood me. I was referring to sedentary comments being thrown across the Floor while the hon. Member is making his speech.

Mr. Hoyle: I thank you, Madam Deputy Speaker, for that comment. I refer now to the hon. Member for Wirral, South. He has directorships of County Seeds Ltd. and Decision Makers Ltd. He is employed as parliamentary adviser to the Hearing Aid Association Wang (UK) Ltd. and Impac plc. He is a consultant to Air Boss Ltd. and Groen Ltd. He is also a solicitor with Fanshaw Porter and Hazelhurst.

Mr. Barry Porter: I am obliged to the hon. Gentleman for his unfailing courtesy in giving me notice that he would put the stiletto between my ribs. Perhaps he might accept that my great failing in life is that no one has asked me to be president of the Association of Scientific, Technical and Managerial Staffs. I have no


doubt that the job would take a great deal of time outside the House, but I do not know whether there is much money in it.
The hon. Gentleman should note that my interests are properly declared. He should also accept that some of my interests in the manufacturing and service industries keep my feet on the ground while his head is in the clouds.

Mr. Hoyle: The simple reason why the hon. Gentleman has not been asked to be the president of the ASTMS is that, as I understand it, he is not a member of a trade union. I must remind him that the ASTMS no longer exists so it is not possible for him to be the president. The ASTMS has become a new union, and is still growing, with more than 6,000 members. So he could not possibly be the president of ASTMS.

Mr. Porter: I apologise, but I must go now, not to a board meeting but to attend a lobby of my constituents.

Mr. Hoyle: I am sorry that the hon. Gentleman is going. When I gave way to him I thought that he might have told us what these nice little earners bring in for him.
I am sure that there is one thing missing from the register: it does not say what people earn from their interests. What I am saying is that it is hypocritical for those hon. Members who signed the early-day motion and whom I have mentioned—I could mention more of them —to support the Government's motion. They still have nice little earnings from moonlighting. The register does not tell us how much they earn. My point is that they certainly will not suffer by giving up the increase. The Government are asking us to give up the increase.
The hon. Member for Ribble Valley (Mr. Evans) said from a sedentary position that some Opposition Members may have outside jobs. All I am saying is that all hon. Members should declare what they earn. If the hon. Member has any interests, I hope that he will register them. Perhaps alongside those interests he should show what they bring in for him. We can only guess what Conservative Members earn from their interests. However, it is clear from the register that many hon. Members must earn more from their interests than their parliamentary salary.

Mr. Nigel Evans: Will the hon. Gentleman give way?

Mr. Hoyle: No, because many other hon. Members want to speak. It is a case of playing politics tonight so that the Government can impose pay restraint on many of the lowest paid in the country. I for one will have no part of it.

Mr. Patrick Nicholls: I start by declaring my interest in the Hill and Smith Group, the Federation of Associations of Specialists and Sub Contractors, Port Enterprises Ltd, the Waterfront Partnership, Howard de Walden Estates, MinOtels and Dunn and Baker. [HON. MEMBERS: "How much do you earn?"] I earn considerably less than I deserve.
The debate has thrown up one aspect which I had not expected to examine but I think that it is useful. It is not so much the question whether the gesture should be made

—I will not fight shy of that phrase—but it has thrown into debate the whole process by which hon. Members salaries are fixed.
My hon. Friend the Member for South Dorset (Mr. Bruce) and others said that there cannot be a Member in the House who wants to go through the invidious business each year of debating our pay rise. It is unpleasant, it is uncomfortable, it is demeaning, and it does not serve any purpose.
Shortly after I became a Member of the House I was pleased to see a linkage established. We could all ask whether the linkage was appropriate. It certainly made the position of senior principal in the civil service one of the most unpopular positions that any civil servant would ever want to hold. To my knowledge, many civil servants hoped that it was a grade that they might be able to overstep at some stage. It is obviously a good idea to have the automatic linkage, whatever level is chosen.
As I understood my right hon. Friend, there seems to be an element of doubt about whether the linkage can exist in the future. I certainly hope that, when the matter is examined next year, the principle of linkage will be there and that the Government will honour, as it were, the spirit of it, if not the letter. So whatever grade we are linked to, I hope that it will not simply be a lower grade with a view to making savings.
There is nothing wrong in the Government expecting Members of Parliament to make a gesture on this occasion. However, I will be slightly saddened if, in the years to come, the principle of linkage is accepted but the link is made to some other grade which is even less than 87 per cent. of, to give one example, the deputy chef in the Members' Dining Room.
It is difficult to get any fix on what the level of pay should be. It is interesting that the Library has produced a paper which I think is one of the most helpful pieces of information that I have seen on the matter. The paper sets out the level of Members' pay from 1911 to the present day, but the levels are adjusted at 1992 prices. That shows that the pay in August 1911, adjusted to today's prices, was £21,300 as against today's figure of £30,900—obviously, I am rounding out the figures. So it looks as though the level of pay in real terms for a Member of Parliament in 1911 was about two thirds of the level today. Hon. Members should bear in mind the fact that we are going back 80 years and that there has been enormous social change, both in the profile of people elected and, indeed, in those who put themselves forward for election to the House. If that sort of differential has been maintained, it shows that we have probably been getting it right. I should like to think that we will bear that in mind when the linkage is restored in some shape or form.
This is an appropriate time to mention my next point; the nexus is fairly clear. Even if I take the view that the level of Members' salaries is about right, I certainly could not say the same for ministerial pay with which it is closely connected. A few years ago, the then Solicitor-General went to the 100th anniversary of a Conservative club in the west country. In his speech, he said that his salary in the 1980s was virtually the same as that of his predecessor 100 years before when he had opened the same Conservative club.
I do not say that we should restore ministerial salaries to what the Solicitor-General was earning then, relatively speaking, but something has gone wrong with the system. It is all very well to expect people who accept ministerial


office not to go into it for profit, but there comes a time when the gap between what Ministers are paid and what able people might expect to command in the outside market becomes so vast that the public interest is not served. I would say that whether the Conservative or the Labour party were in office.
There are former Labour Ministers in the House too, and they will know that a Minister receives a reduced salary in his capacity as a Member of Parliament. I do not understand how we can justify paying a Minister of the Crown less than a Member of Parliament simply because he is a Minister. There is no reason in principle for that.
There is never an ideal time to make such alterations—to restore ministerial salaries to what they should be and to stop the reduction in their salary as Members of Parliament—but it is clear that over the past 10 years, to take no longer period, there will have been opportunities for the problem to be addressed, and that those opportunities were not taken. I should like to think that at some time in the future they will be taken—although I have been in the House long enough to believe that it is highly unlikely that that disparity will ever be dealt with as it should be. To coin a recent royal euphemism, ministerial salaries are relatively insubstantial, bearing in mind the task that Ministers are expected to perform.
It is probably about right that in due course there should be a linkage for Members' pay. But what about the gesture which is being requested? There is a difference between gestures and gesture politics. It is difficult enough to say to a low-paid worker, "Here am I on £30,000 a year" —that may seem a relatively modest sum, but it is hugely more than the average constituent of the hon. Member for Derby, South (Mrs. Beckett) earns—"but I think I should have my 3–9 per cent. this year, because that is what the linkage will be." I do not think that that would go down very well, and I can understand that.
The hon. Lady might say to her constituent, "I have struck a real blow for you today. I have really done something for low-paid workers in my constituency: I am prepared to abstain." She did not say whether she would take the money if her abstention meant that the money would be paid. Probably for reasons of malice and cynicism, I should like to see the hon. Lady say to a low-paid worker in her constituency, "Vote for me; I am the one who did not take a percentage increase on £30,000 a year." For many of our constituents, that is a huge amount of money, and I think that she would find that gesture difficult to sustain.
Sometimes gestures have to be made, even if they engender cynicism. It is fair to say that there is a limit to what the country can afford. We have been told in the autumn statement that the Government believe 1·5 per cent. to be the appropriate maximum increase in the public sector. I cannot prove that the Government are right or that they are wrong. Perhaps the figure should be 1·4 per cent. or 1·8 per cent.—none of us can say—but every penny that goes into the pockets of public sector workers such as ourselves has to come out of somebody else's pay packet, either through taxation or by borrowing, which in turn has to be paid for out of taxation. The Government have to estimate what the country can afford in recession.
Some may say, "I do not agree with that; I do not agree with pay policies at all." Fine. I do not agree with rain in summer, but it happens, and one has to cope with it. Members of Parliament constantly make a whole range of demands to Ministers on behalf of their constituents and

find, inevitably, that those demands cannot be satisfied. Against such a background, I do not see how the Government can do anything but set a fairly strict level, nor how Members of Parliament can expect not to make some contribution.
I accept that some Labour Members do not agree with the policy—I think they are wrong, but that is their view —but I do not understand how, even if he believes the policy to be wrong, an Opposition Member on £30,000 a year can say to a public sector worker who may earn £8,000, £9,000 or £10,000 a year that he opposed the Government because he believed the policy to be wrong. One cannot abstain on the issue. That does not work; it is an issue on which one has to make some judgment.
Debates on Members' pay tend to follow a ritual pattern, as those who have listened to them over the years know. One idea, as expressed by the hon. Member for Derby, South and the hon. Member for Warrington, North (Mr. Hoyle), is that there is something hypocritical in a Member of Parliament with outside interests taking a view on the matter, or signing an early-day motion — [Interruption.] We hear the chorus of abuse again. One would have a little more confidence in the sincerity of that chorus if the hon. Member for Warrington, North, in his rambling researches, had hit upon the relatively few Labour Members who are employable in any other context. There are many who serve in such positions with great distinction—

Mr. Bryan Davies: Will the hon. Gentleman give way?

Mr. Nicholls: I shall give way to the hon. Gentleman in a moment.
I fully understand why the hon. Member for Great Grimsbly (Mr. Mitchell) might not be here today: he has other things to attend to. He is a highly effective Member of Parliament, and so long as he declares his interests in the proper way, there is no reason why he should not be entitled to earn those sums. That makes him a rarity on the Labour Benches. So many Labour Members are unemployable in any capacity but that of former members of the polytechnocracy.
When reading reports of debates such as this one, it is interesting to examine the comments of those whose reflections on the way in which Conservative Members earn money are the sternest. Let us consider the comments of the hon. Member for Bolsover (Mr. Skinner). There is a man who, now that street cleaning has been thoroughly mechanised, is totally unemployable anywhere other than in this House. As recently as 13 July the hon. Gentleman made clear his attitude to being a Member of Parliament. In fairness to the hon. Gentleman, I must tell the House that his remarks, which are recorded at column 835 of Hansard, were made on one of the relatively rare occasions when he was here after prime time television had finished at 4.30 pm. He made it clear that he saw the job of a Member of Parliament as a nine-to-five job, for which he was obviously quite content to receive £30,000 a year. If that is someone's attitude to his work, it is understandable why nobody would employ him to do anything else.
The fact is that what many Conservative Members—and all too few Opposition Members—bring to the Chamber is some knowledge of what goes on in the outside world. There is something thoroughly unsatisfactory about Members who have never gainfully earned their living in their lives, other than perhaps—

Mr. Bryan Davies: rose—

Mr. Nicholls: I do not want to forget the hon. Gentleman. I know that we have a lot of time, so I shall be able to give way to him in a moment.
There is something thoroughly unsatisfactory about hon. Members who bring nothing to the Chamber but bile, biliousness, class hatred and a certain distaste for those of their colleagues who are capable of earning anything other than a Member's salary. It is thoroughly distasteful that the contributions which those few—and we many—can bring to the House should not be heard.

Mr. Davies: Will the hon. Gentleman clarify two matters? First, does he include his list of consultancies and outside occupations in his election address and tell his constituents that those must be taken into account while he is fulfilling his duties as their Member of Parliament? Secondly, when he talks about the sacrifices that we should all make, is he prepared to quantify the sacrifice, in terms of his income, that he will make if the motion is passed?

Mr. Nicholls: I assume—although one should not always make such assumptions when dealing with interjections from Labour Members—that the hon. Gentleman is capable of working out 3·8 per cent., or 1·5 per cent., or 0 per cent., of the existing parliamentary salary. So he will be able to work out—at a stroke, given sufficient time—the amount of income which I would forgo. The hon. Gentleman may say that it does not sound very much. Frankly, on £30,000 a year, it is not very much —but every little helps.
The hon. Member for Derby, South was making the same point when she said that people had to assess the worth of the pay rise in the light of their own personal circumstances. There may be many Opposition Members who, in their personal circumstances, see no necessity to seek additional employment. I have no objection to that, but Members should be entitled to make that judgment for themselves.
The hon. Member for Oldham, Central and Royton (Mr. Davies) wanted to know what was in my election address. I am flattered about that. I certainly mentioned in my election address the fact that I was a practising solicitor and that was publicised as I went through the selection process. I made it clear that I worked for a living and that I had not come up through the more traditional avenues with which the hon. Member for Oldham, Central and Royton will be familiar. I had not come up through the unions, the polytechnocracy or the Labour party research department. I made it clear that I continued to work for a living and that I believed that I would bring to the House of Commons—and to that rarefied atmosphere in which hon. Members worked—experience of work in the outside world.
To cheer up the hon. Member for Oldham, Central and Royton, I can tell him that a local newspaper produced a detailed profile of the various parliamentary candidates and listed their outside activities and consultancies. To confirm what I hope was the hon. Gentleman's assumption, I am delighted to tell him that I had a great deal more experience of the outside world than any of my opponents. Through my connections, I was able to show that I had a far wider range of knowledge of the issues that affected my constituents than any of the other candidates. I hope that that will reassure them.
I had expected to hear more in this debate about our recent debate on the increase in hon. Members' expenses. The debate was interesting in many ways, because the Government thought that it would be helpful to give a lead about what they thought hon. Members should do. That lead was very helpful and I examined it carefully. Had I been a member of the Government, I would probably have made the recommendation to the House that the Government had made. However, I am not a member of the Government and, in the end, I had to make what I thought was the correct judgment.
While I welcome guidance from the Government in many areas, I decided that I could not welcome guidance from the Government if that guidance told me that the demands that are rightly made on me as an hon. Member were not to be satisfied as I would not have the necessary funds to satisfy them.
Therefore, I thought that the issue should not be expressed, as it was so often expressed, as simply more expenses for hon. Members, but that instead there should be an upper limit against which an hon. Member could draw as necessary. I was one of the relatively few hon. Members to vote for that idea. A great many more, who are conspicuous by their absence today as they were then, did not turn up and vote for the proposal.
There is all the difference in the world between the expenses necessary to provide the kind of services to one's constituents that they are increasingly demanding and an increase in salary. Obviously, cynics in the Press Gallery and the cynics who write to hon. Members will say, "No, it's all the same really. An increase in expenses is the same as an increase in salary." A business man put precisely that point to me. When I asked him whether he thought that every time he gave his secretary a new word processor or an upgraded typewriter that increased his standard of living, I did not receive a reply. Expenses and salaries are entirely different matters.
When we come out of this recession, public pay will be dealt with as it was before. Whatever the complexion of the Government may be, every year they will tell us that times are hard and restraint is necessary. We will always be told that. That has been part of the Treasury abacus and word processor since Adam was a lad. Some people will negotiate, some will bargain, others will have linkages and others will have formulae. That is the normal world.
However, today's world is not a normal world. It is a world of recession. Hon. Members on both sides of the House have friends or relatives who have lost their jobs during the recession. People have suffered greatly. I doubt whether there are any Conservative or Opposition Members who do not have friends or acquaintances who have lost everything in the recession. At the end of the day, with people in that position, we must make a gesture and be prepared to take the lead.
Although 3·8 per cent., or even 1·5 per cent., of £30,000 is not very much, it sets a keynote. We must be prepared to say that that is what we are recommending for the country and that is what we are prepared to take ourselves. That should be agreed on both sides of the House.

Mr. Derek Fatchett: The hon. Member for Teignbridge (Mr. Nicholls) was absolutely correct when he said that the proposal is a gesture. My hon. Friend the Member for Derby, South (Mrs. Beckett) called


it a smokescreen. However, the value of the hon. Gentleman's gesture would be greater if we achieved one or two objectives set out in the amendment that I tabled but which Madam Speaker did not select.
The hon. Member for Teignbridge made two points upon which I will comment. He said that we live in a world of recession. Opposition Members remember what Conservative Members were saying only seven months ago. Not one Conservative Member said then that there would be a public sector pay freeze. Did any Conservative Member state in his or her election manifesto that they would support a public sector pay freeze? Not one of' them did. They all said that it was possible to have tax cuts and more public spending and that we were coming out of recession. The green shoots were everywhere. They were on every election address—

Mr. Nicholls: Will the hon. Gentleman give way?

Mr. Fatchett: No. The hon. Gentleman spoke for a long time.

Mr. Nicholls: Will the hon. Gentleman give way with regard to my election address?

Mr. Fatchett: No. I am sure that that is a very important document and that it will be read by posterity.
Conservative Members made promises, but not one of them has been reproduced in reality because the recession continues. However, the Government are now implementing a public sector pay freeze which is a promise that they did not make.
Conservative Members are now starting to cry crocodile tears for the unemployed and the low-paid. Let us consider what has happened under this Conservative Government. More than 2 million more people are unemployed now than in 1979. In the face of that, Conservative Members supported the Government in the Lobby just a week ago when the Government removed wages council protection from the lowest paid. I do not want to hear arguments from Conservative Members about protecting the low-paid and the unemployed.
My hon. Friend the Member for Derby, South was right. The proposal is a smokescreen and the Government are looking for a fig leaf as they stumble from crisis to crisis and policy to policy. The Leader of the House hinted—this point was picked up by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)—that there will be a restoration of the amount of money that might be lost this year because of the loss of linkage on this occasion. At some time in the future, the pay of hon. Members will be restored in real terms to the value that they might have enjoyed if there had been no freeze on their pay this year.
Is that correct? If so, I point out gently to the Leader of the House that it is worth while re-reading the history of such matters. Every public sector pay freeze has created a dam that burst as the public sector caught up. If the Leader of the House is going to be consistent, can he tell us whether, if hon. Members' pay is to be allowed to catch up in real terms, the same will be true for teachers, nurses, doctors, low-paid public sector workers and school dinner ladies? Will the pay of all those people be allowed to catch up? That is an important message which should come from our debate.
There are two crucial points to be made about our annual debate on Members' pay. First, as hon. Members have said, we need an acceptable system to determine our

pay. In many respects, it is not appropriate for the House to have this debate. Not many hon. Members enjoy the debate. We need a system of linkage; in that regard, I agree with the hon. Member for Teignbridge: it should be restored.
The details of that linkage may now be subject to further discussion or, to use the impolite term in this place, negotiation. Nevertheless, there must be a principle of linkage so that we do not go through this process every year. This is not gesture politics today; it is almost macho politics. We are showing whether we are prepared to make a sacrifice, and then we try to lead people into what is obviously an elephant trap in respect of our pay. That is an embarrassment, and it is foolish. If we are to have an orderly public sector pay system, I suggest to the Leader of the House that hon. Members could, as a lead, have an orderly system for their own pay.

Mr. Robathan: I agree entirely that we should have an orderly pay system for Members of Parliament and that it should be linked. I am new to the House, so the hon. Gentleman will forgive me if I am wrong, but I understand that we are to vote on the pay increase for the current financial year. I think that I am right in saying that the pay increase for nurses, teachers and civil servants for the current financial year has already been decided and awarded. This is a back-pay increase for us which we are forgoing.

Mr. Fatchett: The hon. Gentleman is not absolutely correct. He will find that there are many public sector pay increases that have to be determined, and whether they can be fully funded by local government and national health service money is a crucial question. There is an argument about linkage. I hope that we opt for linkage, establish it, keep it, and do not repeat this debate in future.
The second crucial principle for any system of Members' pay is openness. That is why I tabled my amendment. One or two Conservative Members have started to follow my lead. My amendment is a bridge-building, consensual amendment. It would make sure that, in the Register of Members' Interests, people disclosed the finances that they obtained from the outside interests that they pursued.
I am not saying for a moment that people should stop pursuing those interests. I am not saying that they should be unelectable in any sense if they have outside interests: that decision will be taken by the electorate. If electors feel that a Member of Parliament has such tremendous ability, enthusiasm and energy that he or she can hold 12 outside directorships and six consultancies and still do the job of a Member of Parliament and they vote for that person, so be it. I certainly do not object to that, although I might question the judgment of the electorate.

Mr. Nicholls: rose—

Mr. Fatchett: I shall develop my point further and then give way.
I spent a little time looking at the Register of Members' Interests—relating to the previous Parliament, unfortunately—and looked up Conservative Members' interests. My principle applies to all hon. Members. Before the previous election, on the Conservative Benches there were 359 directorships and 222 consultancies. Let us say that each one attracts a fee of £2,000 a year. That might be on the low side—

Mr. Hoyle: Very low.

Mr. Fatchett: I am a reasonable and modest man trying to build bridges across the House. Let us say that it is £2,000 a year. That amounts to £1·2 million going into Conservative Members' pockets.
An important constitutional question needs to be asked: what is that money buying? People who spend money on hon. Members want to buy something, and it is called influence over Government policy. We know that from the American system. The American system is corrupt. That is why they talk about pork barrels and the influence that corporations have on congressmen and senators. My amendment says to each and every Member of Parliament, regardless of where he or she sits in the House of Commons, "Declare all your interests in the register and say how much money is involved." That is a very simple principle.

Mr. Nicholls: I have considerable sympathy with the way in which the hon. Gentleman is putting his point, but it is entirely fair that constituents, if they are interested, should know what interests are declared in hon. Members' entries. The hon. Gentleman will know at once that, the moment it comes out, the register is of great interest to the local press. Our salaries as Members of Parliament should be known to the public, because they are a charge on the public Exchequer. The amount of any other income is a matter between the person concerned and the Inland Revenue.
What extra information does the hon. Gentleman think constituents would get in knowing, in a list of outside interests, how much money was being paid? Surely, according to the hon. Gentleman's logic, they should know that those interests exist. Other than public prurience, what extra will constituents have in knowing what sums, if any—that is important—are paid?

Mr. Fatchett: Electors would know a great deal about our political system. They would know about its openness and genuineness. They would also know—I put it no higher than this—that when people speak in the House of Commons they are either free men or less free men. They would also know—it is the nature of life, and let us accept it as such—that, if people are receiving £100,000-a-year directorships, they might try to act in the interests of those directorships. If that is the case, the public have a right to know. [Interruption.] If Conservative Members say, "No, it doesn't happen," let us open the system and see what does happen.
The key to my proposal, which is obviously beginning to attract support among Conservative Members, has the support of the Prime Minister himself. I have not discussed the detailed amendment with the Prime Minister, but I know that he is in favour—[Laughter.] I would not discuss it with him because he might not remember it, so there is no point in my discussing it with him. The Prime Minister is in favour because he believes in open government, and this matter is part of an open democracy. We need to ensure that the public know what goes on in this place. That is the purpose of my amendment.
We have heard many arguments about making a sacrifice—a sacrifice that is equal to that of others outside. There are grades of sacrifice. If one is a £5,000-a-year school dinner assistant, there is one level of sacrifice. If one is a £30,000-a-year Member of Parliament with no other income, there is another level of sacrifice. But if one is a

£30,000-a-year Member of Parliament with 11 directorships and eight consultancies, there is yet another level of sacrifice. The hon. Member for Teignbridge lectured us about sacrifice. What amount of money is he earning from outside? Will he give a commitment today that he will take no further increase in those interests next year?

Mr. Jonathan Evans: Has the hon. Gentleman read today's issue of the Western Mail, the well-known national newspaper of Wales? It contains an interview with his former colleague, Mr. Leo Abse, who was a Member of Parliament for Torfaen. He expresses the view that the House is devalued by having so few Members of Parliament nowadays with outside interests. Is the hon. Gentleman aware that, in a book that was published some years ago, Mr. Abse offered the observation that, throughout the time that he sat on the Labour Benches, he earned more money than the Prime Minister of the day earned and felt that that freed him from the influence of his own Whips?

Mr. Fatchett: The hon. Gentleman strongly makes my case for my amendment, if it had been selected. My amendment does not relate only to Conservative Members—

Dame Elaine Kellett-Bowman: Will the hon. Gentleman give way?

Mr. Fatchett: I shall give way to the hon. Lady in a moment, as her interventions are always a treat for the House.
My amendment relates to all hon. Members, regardless of political colour. We need to know whether outside experience has an important bearing on people's judgments of legislation. Let us look at the extent of that and the amount of money involved so that there is no corruption. That is why we need openness—so that we know that there is no corruption and that people are representing the interests of their constituents. That is what my amendment is intended to do.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I must remind the hon. Gentleman that, although that subject is relevant to the debate, his amendment was not selected.

Mr. Fatchett: I understand what you are saying, Mr. Deputy Speaker. I always defer to your judgment, and quite rightly. I was putting forward a principle for a general pay system for Members of Parliament. I hope that what I have offered so far will win widespread acceptance.

Dame Elaine Kellett-Bowman: The hon. Member for Derby, South (Mrs. Beckett) made some scathing references to family income. The hon. Member for Cunninghame, North (Mr. Wilson) omitted to mention that he has a number of directorships—for example, in West Highland Publishing Co. Ltd.—and very substantial declarable shareholdings. Many Opposition Members have husbands or wives who are highly paid trade union officials. Should such facts be declared as well?

Mr. Fatchett: I have two comments in response. All directorships and consultancies, regardless of political party, would be declared under the system that I think is fair. Spouses and partners are irrelevant to what goes on.

Mr. Nicholls: So the hon. Gentleman's wife is a wealthy girl.

Mr. Fatchett: The answer to that is no. The issue is for the House to decide, but I think that that is an irrelevance.
I have some ideas on how we can achieve a better system for Members' pay. We need to discuss our democracy, openness, the information made available and ways to reduce corruption so that the public can have confidence in the system.
The Government have degraded our constitution and our democracy. Too often, the only characteristic taken into account when someone is appointed to public office, either in the national health service or in other places, is that he or she should be "one of us"—a card-carrying member of the Conservative party.
I believe in openness and democracy. We must end corruption, and that is why we need an open system in the House so that we know what people are paid, where it comes from, and what interests they represent.

Mr. Andrew Robathan: I found the speech of the hon. Member for Leeds, Central (Mr. Fatchett) interesting. I agree that Members' pay should be linked to some grade. I am not sure that I agree with much more, and I do not agree that Members can be bought. Should I ever have a directorship, I assure the hon. Gentleman and other hon. Members that I shall not be bought.
This is a good time to declare that I have no pecuniary interests. I have a small military pension, which I hope Opposition Members will not deny me. It will not buy me much, although I worked for it for 15 years, and I shall get it every day for the rest of my life, whether I am underneath the arches at Charing Cross station or here.
I find it distressing and disappointing that any hon. Member would vote against the motion. Opposition Members should consider their consciences. We all know that Members of Parliament are not overpaid. I have only been a Member for about seven months, and I am astonished at how hard I have worked. I never thought that it would be like this—I find it extraordinarily hard —[Laughter.] Hon. Members may laugh, but by God it is hard. We are not overpaid—I know that and Opposition Members know it. My contemporaries from university are generally earning a great deal more than I am, but I do not mind; I chose to come to this place, as did Opposition Members.
The job should be rewarding, and it is. Our salaries should be similarly rewarding and fixed to some other pay scheme and we should not have to face the unedifying spectacle of hon. Members voting on their pay.
The hon. Member for Leeds, Central mentioned outside interests, but I do not know how hon. Members find time to do other things. Opposition Members are pointing at the Conservative Benches, but when the hon. Member for Warrington, North (Mr. Hoyle) talked about the "stench" from our Benches, I thought that that showed some hypocrisy on the part of Opposition Members. I have the Register of Members' Interests here and I have made one or two notes. I shall not mention names, as that would be invidious—[HON. MEMBERS: "Go on."] No, I shall not.
The director of West Highland Publications Co. Ltd. is not sitting on the Government Benches, nor is the parliamentary adviser to the National Market Traders

Federation, the director of Ladbroke plc or the person who gets the £2,000 consultancy from the National Union of Teachers.

Mr. Paul Flynn: I am well aware that Members in every corner of the House have outside interests. During the last Parliament, 14 per cent. of Opposition Members had outside interests, but 85 per cent. of eligible Conservative Members had paid outside interests.

Mr. Robathan: I am grateful to the hon. Gentleman, but the question is: who would employ Opposition Members? I do not want to be uncomplimentary about the Opposition Member who is the parliamentary adviser to Merck, Sharp and Dohme, and also a member of the conciliation board of the European Space Agency. As Opposition Members know, there are lawyers and Queen's counsel on both sides of the House.
I believe that the right hon. and learned Member for Monklands, East (Mr. Smith) is a Queen's counsel, which I find interesting. I am sure that he gains enormously from the experience of being a good lawyer—or not, as the case may be.
Many hon. Members have union sponsorship and its meaning is indistinct; often, the register states "no pecuniary interest", but I understand that the unions assist greatly in the constituency, by running the office and the political side of things.

Mr. Nigel Evans: Does my hon. Friend not find it interesting that, the hon. Member for Leeds, Central (Mr. Fatchett) said that, because Conservative Members were in receipt of funds from companies, they were somewhat tainted and could not be independent? As my hon. Friend has just intimated, some Opposition Members are sponsored by trade unions. Does that mean that they are tainted, that they are not independent and that they put their unions before their constituents? I have here a list of all Labour Members who are sponsored by trade unions. Is the hon. Gentleman saying that all those Members are tainted?

Mr. Robathan: As I said, should I ever be a director I would be independent, and I hope that Opposition Members who are sponsored by trade unions take the same line.
The work done by Conservative Members is often related to work that they have done in the business world. It is important for us to understand that world, especially at this time of recession. It is no good sitting back with no experience and saying how much hon. Members know about business, when they know nothing. It is important for Members to have up-to-date knowledge of the business world. My up-to-date knowledge of it is not immense, but I try to get out and to learn a little.

Mr. David Hanson: The hon. Gentleman said that it is important to have outside interests and to be aware of the business world. I can fully accept that, but why do not he and his hon. Friends do it for free?

Mr. Robathan: I had better answer that—it is an interesting argument. I do it for free when I am trying to find out what is going on, but hon. Members have a busy life and perhaps they feel that such work should be rewarded.

Mr. Bill Walker: With my accent, I do as little as I possibly can for free. Throughout my life I have taken the view that something that is worth nothing, is worth nothing. The worth of an individual—a Member of Parliament or whoever—is the worth that he can earn in the marketplace, and we ought not to be ashamed of that, whatever Opposition Members say.

Mr. Robathan: I am grateful to my hon. Friend for that interjection and assistance.
Members' interests are not the subject at issue. The motion is important, and Opposition Members degrade it by talking about who is earning threepence for doing what, and who is sponsored by which union or is a director of what company. It is Opposition Members who tell us what terrible trouble the country is in and it is no secret that we are in a severe recession. All of us discover how severe it is when we go around our constituencies.
I have just been sitting on the Employment Select Committee and I apologise for not being here at the beginning of the debate. We were listening to evidence on the problems facing the horse racing and the coal industries, which are costing this country jobs.
I know—as do Opposition Members—what a catastrophe it is to lose one's job. The recession is a catastrophe to people who have lost their jobs and, yes, the motion is a gesture. It is about leadership.

Mr. Kirkwood: Oh.

Mr. Robathan: The hon. Gentleman may scoff, but perhaps that is because the Liberals know nothing about leadership.
The country is looking to us for leadership. [Laughter.] The Opposition may laugh, but that is because they never get the opportunity to lead, and I am not surprised. The people look to us for leadership, and it is obvious that they would get the leadership that they deserved if they voted for the Labour party.
The motion is a gesture, but leadership is about the perceptions of being led. We must be seen to lead by forgoing the pay rise that was awarded before I entered the House.
The private sector, of which the Opposition appear to know very little, has made pay cuts—de facto pay cuts through short-term working and a shortage of overtime.

Mr. Eric Illsley: Rubbish.

Mr. Robathan: It is not rubbish. You should go and talk to your constituents, but perhaps you never do.
Those people who have no pay except for unemployment benefit are facing a real disaster, and they are looking to hon. Members to see how we will behave. Those in the private sector are suffering real pain, and it is worth hon. Members sharing that pain, if only a tiny part, by forgoing this pay rise.
In these times, public sector wage restraint is necessary. The Opposition may expose their bleeding hearts to public view when they say how they would deal with nurses and teachers, but tonight we are dealing with our pay, not that of teachers or nurses. We must set an example—that is not a dirty word—and show leadership, for that is what we are paid to do. I am absolutely astonished that the Opposition have never heard about leadership or example. [Laughter.] They may laugh, but tomorrow they should go to their constituents, look them in the eye and tell them how they voted tonight.
Public sector pay restraint is linked to the private sector because, surprising as it may be to the Opposition, the private sector provides the money to pay the public sector. Public sector money does not grow on trees—it comes from the toil of those in the private sector. I note that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) appears to be convulsed with laughter once more; he obviously understands little at all. I also note that he is sitting on his own, as usual.
The Opposition do not understand about the link between the public and private sectors because they have no experience of real work. Public sector pay restraint is necessary because the money for that pay comes from the private sector. If the Opposition speak to those of their constituents who work in the private sector, they may come to understand that.

Mr. Nick Ainger: Before I became a Member, I spent all my working life in the private sector. I should be interested to know how many years the hon. Gentleman spent working in that sector.

Mr. Robathan: I have already said that I have no experience of working in the private sector, which is why I receive a military pension. That is why I do not presume, unlike the Opposition, to lecture the private sector on how to run its businesses. I suggest that British industry has been too much influenced by people who have no experience of working in it, let alone any idea of how to run it.

Mr. Edward Garnier: My hon. Friend and I represent Leicestershire. Has he taken the opportunity to read the Leicester Mercury in the past month, which has singled him out for leading the campaign in the county in favour of the motion? Does my hon. Friend accept from me that the readers of that newspaper, who number several thousand—[Interruption.]—support the campaign that has been conducted for pay restraint, led from the front by Members of this House, such as my hon. Friend and myself?

Mr. Robathan: I am grateful to my hon. Friend and next-door neighbour. The Opposition may scoff, but each evening about 130,000 people read the Leicester Mercury.Many of its readers vote Labour but all of them believe that we should vote in favour of the motion.
I want to be able to go to my constituents and look them in the eye. I hope that Opposition Members will be able to do the same with their constituents. I want to be able to say, "I may still be employed and I may be earning nearly £31,000, but I understand your problems and I shall try my best to make those problems a little better." At least that will show that I understand that my constituents look to the House of Commons for leadership and for example. That is what is sought tonight, and I commend the motion to the House.

Mr. Bill Etherington: I have found tonight's debate interesting, if very confusing.
I apologise to the Leader of the House for not being present when he moved the motion, but, because of Government policies, I seem to spend a lot of time meeting people who come here to lobby hon. Members to let us know how bad things are for them.
It was interesting to listen to Conservative Members telling us about free enterprise. They have sought to explain that it is satisfactory for them to have four or five jobs, but I do not accept that when nearly 3 million people are unemployed. That explanation might be satisfactory legally, but it is not satisfactory morally. Conservative Members should remember that when they cast their vote tonight.

Mr. Nicholls: Will the hon. Gentleman give way?

Mr. Etherington: No; I shall not give way because I have been listening to you for long enough and I have just 10 minutes for my speech.

Mr. Nicholls: Oh, come on, try.

Mr. Etherington: No.

Mr. Nicholls: rose—

Mr. Deputy Speaker: Order. While I have been in the Chair, the debate has been good-humoured. I appeal to the House to allow the hon. Member for Sunderland, North (Mr. Etherington) a chance to express his views without interruption.

Mr. Etherington: Thank you, Mr. Deputy Speaker. The attempts by the hon. Member for Teignbridge (Mr. Nicholls) to intervene prove one thing; that the old Chinese proverb
He on thin ice shouts loudest
is appropriate. Tonight, Conservative Members are showing the electorate exactly what they are.
It is all very well to talk about the £31,000 that hon. Members earn. I happen to be one of those who believe that that is more than enough. Before I became a Member, I was a trade union official, and I took a reduction in salary to come here. I would willingly do so again if that would help the people who will suffer most as a result of the 1·5 per cent. pay limit that has been imposed by the Government.
Tonight's motion is about the failure of the Government's economic policies. Since 1979, they have carried on as the handmaidens of the City, the Confederation of British Industry and other similar interest groups. Their policies have been a dismal failure. Instead of asking those who have done extremely well in their 13 years of rule—the top 5 per cent. who have received almost as much in tax relief as has been earned from North sea oil revenues—to make some contribution to the state, now that the country is not doing so well, they expect the lowest-paid in society to bear that burden. That is not on.
I hope that everyone in the country realises just what you are doing and what you are about. You are about what you have been about for the past 13 years—making the wealthy, wealthier and the poor, poorer. You have robbed old age pensioners, you have reduced the standard of living of the unemployed and the disabled and you are now seeking—

Mr. Nicholls: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is launching a grossly unfair attack on you, and I do not believe for one moment that you have done any of those things. If you have, you may feel that you want to clear the air now.

Mr. Deputy Speaker: I am grateful to the hon. Gentleman, hut I note that he did not give that advice

when his hon. Friend the Member for Blaby (Mr. Robathan) was making the same mistake. I always hesitate to intervene when new Members are speaking, but. I remind all hon. Members that it is not the practice in the House to use the word "you" when hon. Members are not addressing the Chair. That applies to hon. Members on both sides of the House.

Mr. Etherington: Thank you, Mr. Deputy Speaker; I appreciate that advice.
I was, of course, referring to Conservative Members. I still have a little humility in my soul, unlike many of them. If they had a little humility in their souls, they might realise what was involved in the proposal in the Chancellor's autumn statement. When I heard the first part of the statement, I thought that it was good and that the analysis was excellent. I accept that there are international factors over which the Government have no control, but I also believe that the Government have been responsible for much of their own misfortune by their policies.
It is unfair for Conservative Members to expect the least able in society to bail the Government out, but in many ways that shows what they believe. Many of the people on whom the Government intend to impose a 1·5 per cent. maximum pay rise are among the lowest paid and are living below the subsistence level determined by the EC.
It would have been better if the Government had considered the introduction of progressive income tax. They do not believe in it, but the important thing about progressive income tax is that, if more money is available to the poorer people, it gets back into the economy and is not invested abroad or put into property, thus raising property prices.
The reason I shall vote against the motion is not that I am concerned about my salary. It will make very little difference to me whether I get 0 per cent., 2 per cent., 4 per cent. or 10 per cent. more. I am not concerned about a pay rise. It may concern Conservative Members because they have proved that they are concerned about trying to acquire wealth. That seems to be their main reason for existing. They do not want to distribute wealth; rather, they want to exploit those who create it.
That is what the motion is about. If I were to vote for the motion, I should be betraying the people in the public sector who are poorly paid, those who support the policies that I support, because they are the people who would suffer. [Laughter.] It is all very well for Conservative Members to snigger and grin. I do not mind that. I quite enjoy the entertainment which they give me from time to time. I do not want to be churlish about it, but it is time for Conservative Members to think about what they are doing, because the Government will never regenerate the economy as long as they keep to their present policies.
The motion is the precursor to carrying out those policies. I ask Conservative Back Benchers to consider their constituents. We have heard some mealy-mouthed references to looking our electors in the eye. I shall not have any problems in facing my constituents and explaining to them what I have done, because I work on their behalf. We do not need lectures from Conservative Members about how good they are and about how they could be employed when Opposition Members could not.
I know one thing: if I happened to end up on a desert island, I certainly would not be looking to the Government Benches to find the admirable Crichton. If some


Conservative Members who are so keen to taunt us when we are genuinely trying to look after our constituents could not find a bank, an estate agent or a solicitor on the desert island, they would have to do what they have done all their lives—look around to see who they could exploit, because they are not capable of doing anything on their own.

Ms Joyce Quin: I am glad to have the opportunity to say a few words in the debate, both because I support the amendment moved by my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) and because I share many of the anxieties voiced by my hon. Friends and other Opposition Members about what the Government are doing via the motion.
Like my hon. Friend the Member for Leeds, Central (Mr. Fatchett), I also tabled an amendment, which unfortunately was not selected. However, I am glad that the concerns expressed in my amendment have been covered in the debate. I should like to refer to them in the next few minutes.
My main concern was that the Government, through the motion, were effectively destroying the linkage between our salaries and the salaries of the civil service grade. It is inconsistent of Conservative Members to argue on the one hand that they are in favour of linkage and on the other to support the Government's proposal effectively to break the linkage. They should think about that inconsistency and illogicality in their argument.
I listened carefully to what the Leader of the House said about securing the linkage for the future and to the assurances that he gave us. I would have felt more reassured if he had brought forward for debate an examination of the link in the light of the changes in the civil service and had not simply put the motion forward as part of the measures which the Government had previously announced in the autumn statement. That is the weakness of the Government's position.
I want to make it clear, as my hon. Friends have done, that I do not support what the Government said in the autumn statement about public sector pay. The Government are using us as a smokescreen in order to keep down the pay of the most vulnerable in society. Like many of my hon. Friends, I am not willing to take any lessons from Government Back-Bench Members about concern for low pay when the Government are abolishing wages councils, are refusing to accept Maastricht's social chapter and are presiding over a period when the gap between top earners and the lowest earners has widened so dramatically.
Ministers are out of touch with ordinary Members of Parliament on both sides of the House on the issue. They do not seem to value properly the work of a Member of Parliament who exists on a Member's pay. Recently I came across a flagrant example of that in an article written by the former Secretary of State for Trade and Industry, Lord Ridley, in the Evening Standard. In the article he described what it is like when a Minister loses his position or has to resign:
Resignation from ministerial office is traumatic. Suddenly you are alone. There is no office, no private secretary, no chauffeur-driven car, no income and nothing to

do. Is one's whole political career at an end in one day's fateful decision, and will one have to find a new occupation in life?
I understood that when a Minister ceased to be a Minister, he or she remained a Member of the House, on the salary of a Member of Parliament and with the job of a Member of Parliament to do. I agree with the Top Salaries Review Body's analysis of an MP's work, which, found that a full-time Member was on average doing 63 to 69 hours of work a week and that the work of a Member is a full-time job. It worries me that Ministers treat a full-time Member's job in such a dismissive way.
Much of the debate has been concerned with outside interests. They are important, but I agree with the view already expressed in the debate that there is no reason for Members to be paid for outside interests. Indeed, many of us have outside interests and have our feet firmly on the ground in our constituencies. We feel very much involved in the life of the community but do not want pay for our outside interests.
I urge the Leader of the House to give us far more assurances about the linkage and timing of our pay decisions in his reply than he did in his opening speech. I hope that he will respond seriously to the concerns expressed by hon. Members on both sides of the House. It is wrong for the Government, in such a cavalier way, unilaterally to break the consensus on Members' pay, which has been built up over a long time.

Mr. Newton: With the leave of the House, I shall reply to the debate.
On one or two occasions, I thought that the debate had become one on Members' interests rather than Members' pay. I shall not go into all the arguments that have been expressed, as some of them were fairly partisan. I am glad to say—I hope that the hon. Member for Derby, South (Mrs. Beckett) was aware of it—that the Select Committee on Members' Interests was reconstituted at the end of last week. I understand that it will meet next Tuesday, which should pave the way for the publication of the Register under aegis of that Committee. I hope that hon. Members on both sides of the House will welcome that.
There has been much discussion about what some Members have termed "gesture politics". That is an unreasonable description of a policy that is concerned with some £1·5 billion of public money and is directed to maintaining priority programmes and giving capital expenditure the emphasis which hon. Members on both sides of the House rightly think it should have.
I make no apology for saying plainly, as some of my hon. Friends have done during the debate, that in circumstances in which, for reasons that I have just explained, the Government think it right to ask for pay restraint in the public sector, it would be wrong if the House were to proceed as if no difference should be made in respect of its own pay. It is not reasonable to describe the Government's proposal as gesture politics.
The right hon. Member for Manchester, Wythenshawe (Mr. Morris) and others have commented on pensions. I listened carefully to what the right hon. Gentleman said, but I remain convinced, not that he is wrong to wish to deal with the problem that he identified, but that his resolution would not be an effective or justifiable way of seeking to do it. It would be much better if he were willing to accept my offer to undertake discussions about an


alternative way of seeking to meet that objective through additional voluntary contributions associated with the parliamentary pension scheme.
May I repeat what I said in my speech in explaining why I doubted whether the amendment was an appropriate way to proceed. I said that, as the long-term position will not become clear until the House has debated and decided the longer-term linkage issues, Members would not find it easy to determine whether and to what extent they wished to take advantage of what is proposed in the amendment without some risk—I think that it is a substantial risk—of making payments from which they would derive no benefit.
I have suggested considering a system of additional voluntary contributions operating through the parliamentary pension scheme, which would not be free standing and separate from the scheme, as some hon. Members seem to have thought. It would have the advantage that any benefits that Members bought with those additional contributions would not be limited to the period of pay restraint but would bring a money sum not linked to such a period. They would therefore be better value for money and could be better tailored to a Member's individual circumstances.
I hope that the right hon. Member for Wythenshawe will agree to withdraw his amendment and allow us to look at what I strongly believe would be a better way to proceed. I do not dismiss the need to which he has drawn attention but suggest that we can and should seek a more satisfactory way of dealing with the need. I cannot advise the House to accept the amendment as it stands.

Mr. Alfred Morris: The Leader of the House is aware that there was detailed consultation among the trustees before the amendment was drafted and tabled in my name and theirs. We seek to ensure that the parliamentary scheme itself provides all reasonable protection that Members seek for themselves and their dependants. I emphasised in reply to the right hon. Gentleman that it will be for the individual Member to decide whether he or she wants the insurance offered by the amendment.
The Government's proposal for a system of additional voluntary contributions will also require regulations. If the Leader of the House wants that provision outside the scheme, I see no reason why he could not discuss with the trustees the possibility of making AVCs an additional provision.
I do not want to let the opportunity pass for making it certain that people who may end their service to the House next year or in 1994, through death or ill health, do not leave their dependants at a disadvantage. Will the right hon. Gentleman accept that the trustees gave very careful consideration to this whole matter before submitting the amendment?

Mr. Newton: I repeat what I have said in the past few minutes. I am not suggesting that it would not be right to see whether a sensible approach to that problem can be identified. However, I do not believe that the right hon. Gentleman's resolution, as distinct from my suggestions about possible alternatives, will achieve effectively what he wants. Hon. Members will find it extremely difficult to make judgments in circumstances in which, to use the right hon. Gentleman's words, they are being offered the chance

to make substantial insurance payments, which they might well get. The vast majority would get no return whatever but the money would simply disappear.
I suggest the development of additional voluntary contributions, which would both meet what the right hon. Gentleman wants and ensure that hon Members would get a return for their money. I wish to make that difference between us absolutely clear.

Mr. Ashton: Will the Leader of the House offer to bring the matter back to the House and introduce a scheme which he thinks would be better than the amendment?

Mr. Newton: It was implicit in my opening remarks, and acknowledged by my hon. Friend the Member for Horsham (Sir P. Hordern), with whom I have also spoken on the matter, that if the trustees and Members generally felt that it would be helpful to explore the possibility that I raised—the one to which I have just adverted—I should be happy to assist. I would be making that point in bad faith were I to rule out—or not rule in—doing something about it if a satisfactory arrangement could be made on the basis of those discussions.

Mr. Alfred Morris: I ask the Leader of the House to accept that this is not a moment for exploring opportunities: it is an occasion when we can provide protection that may be essential to the dependants of hon. Members. If he is giving the House, as it were, a bankable assurance that there will be provision to meet the problem that I documented in my speech, we will consider the position.

Mr. Newton: I think that I made it clear to the hon. Member for Bassetlaw (Mr. Ashton) that there is a better way of achieving what the right hon. Gentleman wants. I should like the opportunity to obtain the necessary further advice, discuss the issue with the trustees and then, if we can find a solution that meets the objectives of the right hon. Member for Wythenshawe, I shall present it to the House in the appropriate form.

Mrs. Beckett: I am closely following the argument of the Leader of the House, but I have some concern. I accept his good faith in suggesting that his proposal would be better for hon. Members. However, if I understood the position correctly, when Lady Thatcher retired, having not taken her full salary, the taxpayer made up her pension. My right hon. Friend is not suggesting that; he is suggesting that each Member should have the right to choose.
I find it hard to envisage a scheme under which it would not be better to maintain the value—the full entitlement —of the underlying pension than to adopt any conceivable system of additional voluntary contributions. I should be surprised if a case could be sustained that a better return for the same money could be obtained through additional voluntary contributions than by maintaining the basic scheme.

Mr. Newton: I think that the hon. Lady and the right hon. Member for Wythenshawe may not have taken in my basic point in a difficult argument. The basis on which the resolution is tabled is that the House will need to return to the issue of long-term linkage with civil service pay at the end of next year. Until that longer term issue is resolved, hon. Members will be unable to judge what it is that they are seeking to protect themselves against.
Under the right hon. Gentleman's amendment, hon. Members will be offered an opportunity to place significant sums of money—up to £200 or £300—into a scheme from which they may ultimately receive little or no benefit. I sense that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) understands what I am saying. I am talking about a defined benefit and final salary scheme in which the amount that hon. Members receive is determined by their salary in the last 12 months of their term of office.
In order to deal with the problem which, I accept, could arise in the short term, and about which the right hon. Member for Wythenshawe is anxious, hon. Members will be offered the opportunity to invest significant sums of money that they may find will buy them nothing. I am arguing that a proper additional voluntary contributions system, discussed and agreed between us, would be a much better way to solve the problem and would ensure that hon. Members received a return on whatever money they invested.

Sir Jim Spicer: I do not want to prolong the debate more than a few minutes, but the trustees' anxiety is clear —that some people could fall into the trap. They may depart this life, and while discussions are taking place, their dependants will be left without additional benefit and their widows will suffer in the long term. If we can have an assurance on that key issue—the short-term period before discussions are finalised and a resolution found—I shall be happy.

Mr. Newton: In the very short term—some weeks—but not in the long term, it may be necessary to consider the role of the Members' fund in relation to certain circumstances. However, although I acknowledge the purpose of the amendment of the right hon. Member for Wythenshawe, I do not believe that it could achieve its purpose in a way that Members would find helpful. I sense that one or two other Opposition Members are now in agreement with me. I believe that we should find a more satisfactory way of seeking to achieve the right hon. Gentleman's objective. That is the offer that I am extending.

Mrs. Beckett: Now that I am able to follow more clearly the right hon. Gentleman's argument, I shall put it in words of one syllable. The impact of freezing salaries, possibly over a sustained period, will be so serious that, although in normal circumstances it is always true that it is better for someone to place a defined sum of money in a defined benefit scheme, in this case it might be better to use additional voluntary contributions. That is true in this case because the net loss suffered from freezing is greater than the net gain from additional voluntary contributions.

Mr. Newton: That is almost the exact opposite of what I am saying. The right hon. Member for Wythenshawe is offering Members a short-term insurance policy in which the overwhelming majority of hon. Members would invest money for no return. I would rather devise a scheme into which they could place money if they wished and from which they were guaranteed a return. That is a more sensible proposition, which is why I cannot accept the right hon. Gentleman's amendment.

Mr. Alfred Morris: May I take it from the Leader of the House that he is prepared to meet the managing trustees at an early date to determine the timing of the regulations required by his proposals for additional voluntary contributions?

Mr. Newton: I hope that I made it clear in the very last words of my opening speech two to three hours ago that I was suggesting meeting the managing trustees to discuss the issues. Those discussions will have to take place on the basis of seeking to identify an acceptable scheme to deal with the sort of matters raised by the right hon. Gentleman. Clearly, I would take steps to enable the House to take action on any proposal resulting from the discussions. Is that a reasonable suggestion?
The issue of the right hon. Gentleman's amendment has taken much longer than I anticipated and I sense a feeling of impatience among Members. Therefore, I shall simply repeat two crucial issues for the benefit of those hon. Members who were not able to be present when I first spoke. First, the Government entirely accept the case for re-establishing a clear and automatic linkage with the civil service, comparable with what the House intended when it originally passed the resolution. We have no wish to return to the position whereby the House has to decide Members' pay each and every year.
Secondly, we do not intend that Members should forgo the pay increase that civil servants have already received —3·9 per cent. for 1992 paid in August which, in normal circumstances, we would have expected to be carried through to Members' pay in January—as well as receiving no increase for the forthcoming year. I know that many of my right hon. and hon. Friends attach importance to the issue, and we do not intend Members to be permanently disadvantaged by 3·9 per cent. in comparison with the civil service.
I hope that, with those reservations in mind, my right hon. and hon. Friends, in the context of the overall policy for which they voted after the autumn statement, will support the Government tonight

Amendment negatived.

Main Question put:—

The House divided: Ayes 321, Noes 103.

Division No. 93]
[7.17 pm


AYES


Adley, Robert
Bonsor, Sir Nicholas


Ainsworth, Peter (East Surrey)
Booth, Hartley


Aitken, Jonathan
Boswell, Tim


Alison, Rt Hon Michael (Selby)
Bottomley, Peter (Eltham)


Allason, Rupert (Torbay)
Bottomley, Rt Hon Virginia


Amess, David
Bowden, Andrew


Ancram, Michael
Bowis, John


Arbuthnot, James
Boyson, Rt Hon Sir Rhodes


Arnold, Sir Thomas (Hazel Grv)
Brandreth, Gyles


Ashdown, Rt Hon Paddy
Brazier, Julian


Aspinwall, Jack
Bright, Graham


Atkinson, David (Bour'mouth E)
Brooke, Rt Hon Peter


Atkinson, Peter (Hexham)
Brown, M. (Brigg & Cl'thorpes)


Baker, Rt Hon K. (Mole Valley)
Browning, Mrs. Angela


Baker, Nicholas (Dorset North)
Bruce, Ian (S Dorset)


Baldry, Tony
Bruce, Malcolm (Gordon)


Banks, Matthew (Southport)
Budgen, Nicholas


Banks, Robert (Harrogate)
Burns, Simon


Bates, Michael
Burt, Alistair


Batiste, Spencer
Butcher, John


Beggs, Roy
Butler, Peter


Beith, Rt Hon A. J.
Butterfill. John


Bellingham, Henry
Campbell, Menzies (Fife NE)


Beresford, Sir Paul
Carlile, Alexander (Montgomry)


Blackburn, Dr John G.
Carlisle, John (Luton North)






Carlisle, Kenneth (Lincoln)
Hanley, Jeremy


Carrington, Matthew
Hannam, Sir John


Carttiss, Michael
Hargreaves, Andrew


Cash, William
Harris, David


Chaplin, Mrs Judith
Haselhurst, Alan


Chapman, Sydney
Hawkins, Nick


Churchill, Mr
Hawksley, Warren


Clappison, James
Hayes, Jerry


Clark, Dr Michael (Rochford)
Heald, Oliver


Clarke, Rt Hon Kenneth (Ruclif)
Heathcoat-Amory, David


Clifton-Brown, Geoffrey
Hendry, Charles


Coe, Sebastian
Heseltine, Rt Hon Michael


Colvin, Michael
Hicks, Robert


Congdon, David
Higgins, Rt Hon Terence L.


Connarty, Michael
Hill, James (Southampton Test)


Conway, Derek
Hogg, Rt Hon Douglas (G'tham)


Coombs, Anthony (Wyre For'st)
Horam, John


Coombs, Simon (Swindon)
Hordern, Sir Peter


Cormack, Patrick
Howard, Rt Hon Michael


Cran, James
Howarth, Alan (Strat'rd-on-A)


Currie, Mrs Edwina (S D'by'ire)
Howell, Rt Hon David (G'dford)


Curry, David (Skipton & Ripon)
Hughes Robert G. (Harrow W)


Dafis, Cynog
Hughes, Simon (Southwark)


Davidson, Ian
Hunt, Rt Hon David (Wirral W)


Davies, Quentin (Stamford)
Hunt, Sir John (Ravensbourne)


Davis, David (Boothferry)
Hunter, Andrew


Day, Stephen
Hurd, Rt Hon Douglas


Deva, Nirj Joseph
Jack, Michael


Devlin, Tim
Jackson, Robert (Wantage)


Dickens, Geoffrey
Jessel, Toby


Dicks, Terry
Johnson Smith, Sir Geoffrey


Dorrell, Stephen
Jones, Gwilym (Cardiff N)


Douglas-Hamilton, Lord James
Jopling, Rt Hon Michael


Dover, Den
Kellett-Bowman, Dame Elaine


Dowd, Jim
Kennedy, Charles (Ross,C&S)


Duncan, Alan
Kilfedder, Sir James


Duncan-Smith, Iain
King, Rt Hon Tom


Dunn, Bob
Kirkhope, Timothy


Durant, Sir Anthony
Knapman, Roger


Dykes, Hugh
Knight, Mrs Angela (Erewash)


Eggar, Tim
Knight, Greg (Derby N)


Elletson, Harold
Knight, Dame Jill (Bir'm E'st'n)


Emery, Sir Peter
Knox, David


Evans, David (Welwyn Hatfield)
Kynoch, George (Kincardine)


Evans, Jonathan (Brecon)
Lait, Mrs Jacqui


Evans, Nigel (Ribble Valley)
Lamont, Rt Hon Norman


Evennett, David
Lang, Rt Hon Ian


Faber, David
Lawrence, Sir Ivan


Fabricant, Michael
Legg, Barry


Fairbairn, Sir Nicholas
Leigh, Edward


Fenner, Dame Peggy
Lennox-Boyd, Mark


Field, Barry (Isle of Wight)
Lidington, David


Fishburn, Dudley
Lightbown, David


Forman, Nigel
Lilley, Rt Hon Peter


Forsyth, Michael (Stirling)
Lloyd, Peter (Fareham)


Forth, Eric
Lord, Michael


Fowler, Rt Hon Sir Norman
Luff, Peter


Fox, Dr Liam (Woodspring)
Lyell, Rt Hon Sir Nicholas


Fox, Sir Marcus (Shipley)
Lynne, Ms Liz


Freeman, Roger
MacGregor, Rt Hon John


French, Douglas
MacKay, Andrew


Fry, Peter
McLoughlin, Patrick


Gallie, Phil
McNair-Wilson, Sir Patrick


Gardiner, Sir George
Madel, David


Garel-Jones, Rt Hon Tristan
Maitland, Lady Olga


Garnier, Edward
Major, Rt Hon John


Gill, Christopher
Malone, Gerald


Gillan, Cheryl
Mans, Keith


Goodlad, Rt Hon Alastair
Marland, Paul


Goodson-Wickes, Dr Charles
Marlow, Tony


Gorman, Mrs Teresa
Marshall, John (Hendon S)


Gorst, John
Martin, David (Portsmouth S)


Grant, Sir Anthony (Cambs SW)
Mawhinney, Dr Brian


Greenway, John (Ryedale)
Mayhew, Rt Hon Sir Patrick


Griffiths, Peter (Portsmouth, N)
Merchant, Piers


Grylls, Sir Michael
Milligan, Stephen


Hague, William
Mills, Iain


Hamilton, Rt Hon Archie (Epsom)
Mitchell, Andrew (Gedling)


Hamilton, Neil (Tatton)
Mitchell, Sir David (Hants NW)


Hampson, Dr Keith
Moate, Roger





Molyneaux, Rt Hon James
Spicer, Sir James (W Dorset)


Monro, Sir Hector
Spicer, Michael (S Worcs)


Montgomery, Sir Fergus
Spink, Dr Robert


Moss, Malcolm
Sproat, Iain


Needham, Richard
Squire, Robin (Hornchurch)


Nelson, Anthony
Stanley, Rt Hon Sir John


Neubert, Sir Michael
Steen, Anthony


Newton, Rt Hon Tony
Stern, Michael


Nicholls, Patrick
Stewart, Allan


Nicholson, David (Taunton)
Streeter, Gary


Norris, Steve
Sumberg, David


Onslow, Rt Hon Cranley
Sweeney, Walter


Oppenheim, Phillip
Sykes, John


Ottaway, Richard
Tapsell, Sir Peter


Page, Richard
Taylor, Ian (Esher)


Paice, James
Taylor, John M. (Solihull)


Patten, Rt Hon John
Temple-Morris, Peter


Pattie, Rt Hon Sir Geoffrey
Thomason, Roy


Pawsey, James
Thompson, Patrick (Norwich N)


Peacock, Mrs Elizabeth
Thornton, Sir Malcolm


Pickles, Eric
Thurnham, Peter


Porter, Barry (Wirral S)
Townend, John (Bridlington)


Porter, David (Waveney)
Townsend, Cyril D. (Bexl'yh'th)


Portillo, Rt Hon Michael
Tracey, Richard


Powell, William (Corby)
Tredinnick, David


Purchase, Ken
Trend, Michael


Rathbone, Tim
Trotter, Neville


Redwood, John
Twinn, Dr Ian


Renton, Rt Hon Tim
Vaughan, Sir Gerard


Richards, Rod
Viggers, Peter


Riddick, Graham
Waldegrave, Rt Hon William


Rifkind, Rt Hon. Malcolm
Walden, George


Robathan, Andrew
Walker, Bill (N Tayside)


Roberts, Rt Hon Sir Wyn
Wallace, James


Robertson, Raymond (Ab'd'n S)
Waller, Gary


Robinson, Mark (Somerton)
Ward, John


Roe, Mrs Marion (Broxbourne)
Wardle, Charles (Bexhill)


Ross, William (E Londonderry)
Waterson, Nigel


Rowe, Andrew (Mid Kent)
Watts, John


Rumbold, Rt Hon Dame Angela
Wells, Bowen


Ryder, Rt Hon Richard
Wheeler, Sir John


Sackville, Tom
Whitney, Ray


Sainsbury, Rt Hon Tim
Whittingdale, John


Scott, Rt Hon Nicholas
Widdecombe, Ann


Shaw, David (Dover)
Wigley, Dafydd


Shaw, Sir Giles (Pudsey)
Wilkinson, John


Shephard, Rt Hon Gillian
Willetts, David


Shepherd, Colin (Hereford)
Wilshire, David


Shepherd, Richard (Aldridge)
Winterton, Mrs Ann (Congleton)


Shersby, Michael
Winterton, Nicholas (Macc'f'ld)


Sims, Roger
Wolfson, Mark


Skeet, Sir Trevor
Yeo, Tim


Smith, Sir Dudley (Warwick)
Young, Sir George (Acton)


Smith, Tim (Beaconsfield)



Smyth, Rev Martin (Belfast S)
Tellers for the Ayes:


Soames, Nicholas
Mr. Irvine Patnick and


Speed, Sir Keith
Mr. Timothy Wood.


Spencer, Sir Derek





NOES


Adams, Mrs Irene
Davies, Ron (Caerphilly)


Allen, Graham
Dixon, Don


Anderson, Donald (Swansea E)
Donohoe, Brian H.


Anderson, Ms Janet (Ros'dale)
Dunwoody, Mrs Gwyneth


Ashton, Joe
Eagle, Ms Angela


Barnes, Harry
Eastham, Ken


Barron, Kevin
Etherington, Bill


Bell, Stuart
Fatchett, Derek


Bennett, Andrew F.
Foster, Derek (B'p Auckland)


Betts, Clive
Foster, Don (Bath)


Bradley, Keith
Foulkes, George


Brown, N. (N'c'tle upon Tyne E)
Galbraith, Sam


Caborn, Richard
Galloway, George


Callaghan, Jim
George, Bruce


Clarke, Eric (Midlothian)
Gerrard, Neil


Clelland, David
Godsiff, Roger


Cohen, Harry
Golding, Mrs Llin


Corbyn, Jeremy
Gordon, Mildred


Cryer, Bob
Graham, Thomas


Davies, Bryan (Oldham C'tral)
Griffiths, Win (Bridgend)






Gunnell, John
Murphy, Paul


Hall, Mike
Oakes, Rt Hon Gordon


Hanson, David
O'Brien, Michael (N W'kshire)


Hardy, Peter
O'Brien, William (Normanton)


Harvey, Nick
O'Hara, Edward


Hattersley, Rt Hon Roy
O'Neill, Martin


Henderson, Doug
Orme, Rt Hon Stanley


Hill, Keith (Streatham)
Pope, Greg


Hinchliffe, David
Powell, Ray (Ogmore)


Howells, Dr. Kim (Pontypridd)
Prescott, John


Hoyle, Doug
Quin, Ms Joyce


Hughes, Roy (Newport E)
Radice, Giles


Hutton, John
Randall, Stuart


Illsley, Eric
Raynsford, Nick


Johnston, Sir Russell
Rooney, Terry


Kaufman, Rt Hon Gerald
Ross, Ernie (Dundee W)


Kilfoyle, Peter
Sheerman, Barry


Kirkwood, Archy
Short, Clare


Leighton, Ron
Spellar, John


Livingstone, Ken
Steel, Rt Hon Sir David


McAllion, John
Steinberg, Gerry


McKelvey, William
Stott, Roger


Maclennan, Robert
Wardell, Gareth (Gower)


McMaster, Gordon
Wareing, Robert N


McNamara, Kevin
Williams, Rt Hon Alan (Sw'n W)


Madden, Max
Williams, Alan W (Carmarthen)


Marshall, Jim (Leicester, S)
Wilson, Brian


Maxton, John
Wise, Audrey


Meacher, Michael
Wray, Jimmy


Meale, Alan



Moonie, Dr Lewis
Tellers for the Noes:


Morgan, Rhodri
Mr. Terry Lewis and


Morris, Rt Hon A. (Wy'nshawe)
Mr. Jimmy Hood.


Mudie, George

Resolved,
That the following provision should be made with respect to the salaries of Members of this House—

(a) the salaries of Members not falling within paragraph (b) shall, in respect of service in 1993, be £30,854; and
(b) the salaries of Officers of this House and Members receiving a salary under the Ministerial and other Salaries Act 1975 or a pension under section 26 of the Parliamentary and other Pensions Act 1972 shall, in respect of service in 1993, be £23,227.

Orders of the Day — Car Tax (Abolition) Bill

Order for Second Reading read.

The Economic Secretary to the Treasury (Mr. Anthony Nelson): I beg to move, That the Bill be now read a Second time.
The Bill implements one of the principal measures announced by my right hon. Friend the Chancellor of the Exchequer in his autumn statement—the abolition of car tax.
The Bill continues and completes a measure of tax reform that was begun in the Budget this year, when car tax was reduced from 10 to 5 per cent. It does away with another tax. It will rebalance the taxation of motoring away from the taxation of purchase towards taxation of ownership and use. It ends the discrimination against cars in the indirect tax system whereby previously they alone —apart from the traditional high excise duty goods—were singled out for additional tax on top of value added tax. It will enable the trade to reduce the price of a new car by about 4 per cent., saving the customer about £400 on a typical small family saloon costing about £10,000.
The Bill will help boost the motor industry, and it has been widely welcomed in the industry. It provides a reform that it has long sought. It will benefit business generally, as about half of new cars are bought by businesses.

Mr. Roy Hughes: It seems that there is some misunderstanding about the sum that accrues to the Exchequer through the car tax. The sum of £750 million has been quoted recently, but I understand that earlier it was thought to be a much higher figure. Why is there confusion?

Mr. Nelson: If the hon. Gentleman will allow me, I shall deal with that later in my remarks. The receipts this year are affected by the earlier reduction of car tax from 10 to 5 per cent. Clearly that will affect the accrual for this year compared with last year. Also to be considered is the number of cars on which the tax is paid, and the value of those cars. I shall deal in some detail with past and future tax yields—the yield in future, of course, will be nil—and the estimate of the yield forgone.

Mr. Andrew Mackinlay: The Minister has said that the abolition of the tax will give a boost to the motor car industry. Is he aware that most of those who are involved in the industry—both wholesale and retail—consider that it will be an exercise of damage limitation and not a boost? Can the Minister give us an assurance that there will be a significant increase in car sales over the next year as a consequence of the measure?

Mr. Nelson: Yes, I hope and believe that there will be. The hon. Gentleman need not take my word for it. He need only reflect on the warm welcome that has been given to the abolition by the motor manufacturing and retail industries generally, about which more in a moment.
I shall explain in a little more detail what the Bill does. Clause 1 abolishes car tax with effect from midnight on 12 November 1992. Clause 2 contains a number of consequential amendments to the Car Tax Act 1983. These


include allowing traders' car tax registration to be cancelled when Customs and Excise are satisfied that all the tax due has been paid. They restrict Customs' powers relating to car tax for the future by enabling them to be exercised only in respect of cars on which tax became due on or before 12 November, to ensure that such tax is properly accounted for. There are no new powers for Customs and Excise in the Bill.
Clause 3 provides two transitional reliefs. One relieves from car tax vehicles ordered by customers from retailers on or before 12 November. provided they were invoiced to, paid for in full and collected by customers after that date. The other relieves vehicles held by dealers as tax-paid stock and unsold to final consumers on 12 November.
Clause 4 deems never to have been enacted legislation which was due to take effect on 1 January 1993 to enable car tax to be collected on chargeable vehicles brought to the United Kingdom from other member states after that date under the single market transitional arrangements, which is now, of course, unnecessary.
Car tax was introduced in 1973 to compensate for the replacement of the then 25 per cent. rate of purchase tax by the imposition of VAT, which was then 10 per cent. Car tax receipts last year—I answer the question of the hon. Member for Newport, East (Mr. Hughes)—amounted to about £.1·24 billion. It is estimated that this year, following the reduction to 5 per cent. and now the abolition, it will amount to about £510 million. The cost of abolition for the rest of the year is estimated at £100 million within that figure and the £750 million for next year.
I am the first to acknowledge that forward estimates —it is to be hoped that they are good estimates—will inevitably be slightly "questimates". We have some indications from the industry of what turnover levels will be. As my right hon. Friend the Chancellor of the Exchequer has made clear, the cost of the measure after this year will have to be met by higher motoring taxes in the next Budget. Other motoring taxes include duties on petrol, both leaded and unleaded, and diesel. There is also vehicle excise duty. The House will understand that it would not be right for me to anticipate how the cost will be recouped in that Budget. That will be a matter for my right hon. Friend's Budget strategy.

Mr. A. J. Beith: Will the Minister confirm that, if the cost were to be met by vehicle excise duty alone, it would increase from £110 to £135?

Mr. Nelson: Yes, it would be about that. I shall correct myself if I am wrong but I think that the increase would be £31 if the total cost were borne by VED.
It is difficult to forecast accurately the extent to which the measure will stimulate car sales, but retailers put it at about 70,000 cars, or an increase of about 4 per cent. in the United Kingdom market, which now amounts to 1·6 million new registrations.

Mr. Peter L. Pike: If the maximum benefit is to be derived from the abolition of car tax, we must consider the number of cars produced and the production of car components as well as car sales. That benefit must be passed on to the consumer, to ensure that the producers of cars and components similarly enjoy the maximum benefit from the action that the Government are taking.

Mr. Nelson: I agree that that is important. Fortunately, the car industry—especially now—is extremely competitive. I note that some car dealers are already announcing substantial reductions in the offer prices of their cars. They are not mentioning the abolition of car tax but are taking the benefit for themselves. I am happy to enable them to do so by that marketing technique. There are certainly reductions in the price of new cars, which will be invoiced. Clearly no car tax will be added. I imagine that there will be an impact on the second-hand car market, where there is a differential all the way down the line. It decreases the more that the value of a car diminishes.

Mr. Richard Burden: I think that the Minister said that retailers within the motor industry predict that sales will increase by about 70,000 a year. Will he confirm that the Society of Motor Manufacturers and Traders estimate that the increase will be about 60,000? It stresses that it cannot be confident or that until we rid the country of the fear of unemployment. It takes the view that we shall not be able to regenerate the. industry until then. People do not buy new cars when they think that they will lose their jobs. Does the Minister accept that we require an industrial strategy of the sort which has been advocated by the Engineering Employers Federation and which the Government, so far, have singularly failed to provide?

Mr. Nelson: The hon. Gentleman says that people will not buy cars until they have job security, but in a sense the converse is more persuasive: revival of the car industry is a necessary precondition for the security of many jobs. I shall later explain the central importance that I and, I think, many hon. Members attach to the car, automotive and components industries, which are crucial.

Sir Michael Grylls: The hon. Member for Darlington (Mr. Milburn) spoke about representations by the Engineering Employers Federation. To the best of my recollection, the federation asked for a reduction in interest rates. The Chancellor has reduced them three times since September. It asked for investment allowances, which were contained in the autumn statement, and it asked for the preservation of capital projects. The industry has done rather well. It is odd for the hon. Gentleman to complain when the representations have been met almost to the letter by the Government.

Mr. Nelson: My hon. Friend is right. The change has been welcomed by industry generally and by the motor industry in particular. The abolition of the car tax was warmly welcomed by the Retail Motor Industry Federation, the Society of Motor Manufacturers and Traders, the CBI, the Association of British Chambers of Commerce and many industrial leaders. That warm welcome was in marked contrast to the grudging reaction of the Opposition. The hon. Member for Dunfermline, East (Mr. Brown) suggested that the money should have been put towards prizes in the national lottery. That is not the sort of reaction that one would expect from industry, or, indeed, from the Opposition.
I recognise that the industry has been going through a tough time, with lay-offs and short-time working. Following this and other measures, especially the reductions in interest rates, we believe that there is every prospect of a much brighter economic outlook which will benefit the car industry. I think that we all recognise that


that industry is of great importance to the United Kingdom's economy. Production of motor vehicles and parts accounts for about 5·5 per cent. of United Kingdom manufacturing output. Producers employ 250,000 people, and distribution and servicing employ a similar number. That means that about 500,000 people are employed in the industry.
Output grew rapidly during the second half of the 1980s but fell with the onset of the recession. The most recent figures show that car production was up by 3·7 per cent. in the first 10 months of this year compared with the same period in 1991. Much of the increase in domestic production can be attributed to Japanese car manufacturers, who were one of the key sources of inward investment in Britain in the 1980s. I remind the House of the central importance of attracting and retaining that inward investment, not just for the car industry but for manufacturing generally. For example, Nissan Motor Manufacturing (UK) Ltd has an investment exceeding £800 million. Planned car production next year is more than twice that of last year and the company has just won a Queen's award for exports.
Toyota has spent £840 million on its United Kingdom operations, and that includes a £140 million engine plant in Shotton in north Wales to produce up to 200,000 engines. Honda is investing £300 million in its car manufacturing plant at Swindon. It currently employs 786 people, and that could rise to 2,000 at full capacity. This is not just a Japanese success story, because British car manufacturers have their successes. For example, in the past two months Land-Rover has increased production of its new model.
None of us must lose sight of the importance of the European dimension. There is much loose talk about the effects of imports on the car industry, but more and more of the components used in the assembly of cars are produced throughout the European Community. One obvious, although high-market, example of car production is Mercedes-Benz. Its current procurement of components from the United Kingdom is valued at £25 million, and it will rise to £75 million. The procurement of the Daimler-Benz group generally is worth about £240 million in addition to that.
That means that procurement by a German manufacturer of United Kingdom components, some of which are then imported to Britain, amounts to almost one third of a billion pounds. Similarly, many British companies have subsidiaries and operations in other parts of the European Community producing components that are used by United Kingdom car manufacturers. As I say, we must remember the European dimension. The legislation will be of material benefit in increasing the car industry's turnover. It has been widely welcomed in the industry, and I hope that it will be welcomed by the House.

Mr. Andrew Smith: The Bill seems to be longer than the European Communities (Amendment) Bill, but I trust that we shall deal with it more quickly and with greater agreement. Labour welcomes the abolition of the car tax, and I have no wish to detain the House unnecessarily on this legislation to carry the abolition into effect.
Motor manufacturers, trade unions in the industry, retailers and component suppliers have said for some time that this tax must go. I and some of my hon. Friends, especially those who represent motor manufacturing constituencies, have said the same. The measure will be especially welcomed by Rover and other United Kingdom producers, because the level of indirect taxation in a producer's home market clearly influences the strength of domestic demand, which is the foundation of company strength and of success in other markets.
The old level of car tax was 10 per cent., but VAT at 17·5 per cent. and the double imposition of VAT on the special car tax itself, an anomaly that was greatly resented, meant that British producers faced total sales taxes of 29·25 per cent. in their main domestic market. That compares with 22 per cent. in France and 14 per cent. in Germany. Therefore, it is good that the tax is to go.
The Opposition have two important concerns. Although the measure is welcome, it will not provide the stimulus that the motor industry needs, but neither will the rest of the autumn statement, as my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) said. The Society of Motor Manufacturers and Traders has said that consumer confidence remains shaky because of the fear of unemployment and outstanding debt, especially on housing. Car dealers have already been heavily discounting models and offering interest-free finance. The reduction in interest, about which the Economic Secretary spoke, can be beneficial only through its impact on general consumer confidence. We have yet to see that confidence returning.
Even if the abolition of the tax resulted in an extra 70,000 sales a year, it would, as I said in the debate on the autumn statement, still leave sales about 670,000, or 29 per cent., lower than in 1989. That is a measure of the scale and depth of the recession and its adverse consequences for the motor industry, which, as the Economic Secretary conceded, has had to impose lay-offs and short-time working. We clearly need a recovery programme that will reduce unemployment and restore consumer confidence, but the Government are a long way from that.
We welcome the inward investment about which the Economic Secretary spoke. He was right to mention the extent to which the motor industry is pan-European and, indeed, global. In that context, he should have regard to the importance of stability and proper co-ordination and co-operation in our economic relations with Europe. After the devaluation of the pound, the SMMT said:
there is great uncertainty … over the future direction of Britain's economic and European policy. Inflation is still feared, the pound is regarded as unstable at its present level (which is much too low—the industry was competitive at DM2·90—£1) and there is great concern lest the industry again be subjected to taxation to help the Government fund the PSBR. A two-speed Europe would speedily negate the purpose of the foreign investment so that new capacity would replace rather than add to existing capacity".
I hope that the Government will end the semi-detached attitude that they have been taking in regard to Europe. If they do not, they will damage the prospects for jobs and growth in the motor industry and in other industries.
The Economic Secretary has confirmed the Chancellor's statement that he—or, rather, the motoring public—will pay for the abolition of car tax by means of higher motoring taxes after the end of the financial year. That is the Opposition's second worry. Despite repeated demands from me, the Government have given no answer


to our questions about why the cost of abolition is being put at £750 million, and not at a lower figure that would take account of the additional VAT revenue to which extra sales will give rise. Were there to be 70,000 extra sales—as we hope there will be—they would bring in some £122 million extra in VAT, thus reducing the real cost of abolition to £628 million.
Furthermore, as my hon. Friend the Member for Burnley (Mr. Pike) pointed out earlier, recouping the revenue in the way that the Government propose will not give any overall extra fiscal stimulus. It amounts, in effect, simply to shifting the burden of tax from those who can afford to buy new cars to those who cannot.
As the Minister will no doubt confirm, it is unusual for the Chancellor to commit himself to extra motoring taxes in next year's Budget. He would not normally speculate on what was going to happen until he had presented his Budget proposals: indeed, he frequently says as much when he is pressed on different aspects of the Government's overall fiscal stance. Let me make it clear that Labour is not committing itself now to the extra motoring tax; first, we shall want to know exactly what the Chancellor proposes.
As well as telling the right hon. Member for Berwick-upon-Tweed (Mr. Beith), what it would cost in terms of vehicle excise duty if the Chancellor chose to recoup the cost in that way, perhaps the Minister will tell us by how much petrol duty would rise if he chose that option. Given that the Chancellor has announced that motorists will bear the cost, I feel that the public and the industry have a right to know what he has in store for them.
Although we welcome the abolition of car tax, we do not feel that, in itself, it can provide anything like the boost to confidence that is necessary to stimulate the growth, jobs and future success of the motor components industry, whose future is so vital to this country.

Sir Michael Grylls: The abolition of any tax is a happy development, and the abolition of car tax is no exception. We should be smiling and throwing our hats in the air—if we were wearing them, that is. The proposal proves, if proof were needed, that the Government and the Conservative party are dedicated to the lowest possible taxation.
Manufacturing industry is enjoying the best of both worlds. The Chancellor has introduced the new investment allowances, albeit on a temporary basis; I believe that we also have the lowest corporation tax in the world. That will enable companies to keep their profits and use them to expand—and the only way in which small and medium-sized firms can expand is generally through the use of their own internally generated profits. The motor industry—not just the distribution side, but the components side—contains many successful small and medium-sized businesses. I wish that there were more, and I think that we should try to encourage such a development.
As I think most hon. Members would agree, a few years ago the components industry was not very competitive; it was fairly flabby. One of the best things that Japanese inward investment has done for this country is to compel the component firms to pull their socks up and become really competitive. Japanese motor representatives have

told me that some of our best component manufacturers are among the best in the world. We can be proud of what has been achieved; but there is a long way to go. As the hon. Member for Oxford, East (Mr. Smith) pointed out, this is an international industry: throughout Europe, buyers will look to different sources, and we need to win our share of the market.
As my hon. Friend the Economic Secretary will recall, some years ago we were in the depths of gloom about the state of our motor industry. The British-owned industry had shrunk as a result of various disasters and incompetences—and, dare I say, intervention by a Labour Government, who had not helped by forming the botched-up company that later became British Leyland. That is all history, but they were depressing days. We had American investment, but no investment from Japan.
Since then, there has been a twofold transformation. First, the British-owned industry—what used to be called British Leyland, and is now Rover—has been successfully returned to the private sector, where it should always have been, and is thriving within the British Aerospace empire. Secondly, there has been massive inward investment by Japanese firms. I think that hon. Members on both sides of the House will agree that that investment has virtually no negative aspects. Not only has it brought much-needed employment to areas where unemployment has been, and still is, high; it has provided a spur for efficiency in our motor car and component firms.
I hope that the House will pass the Bill with enthusiasm. I consider it another sign of the Government's commitment to British manufacturing industry: it is an industry that, with the right encouragement—which the Government are now providing—can beat all comers. The British motor industry has much of which we can be proud, both in British-owned concerns such as Rover and Rolls-Royce and in the smaller component firms and the foreign-owned businesses. Its success is already having a dramatic effect on our balance of payments: exports, for example, rose by 50 per cent. between 1990 and 1991. That will lead Japanese firms to gear up and sell into Europe.
I congratulate the Government on the Bill. I hope that we shall never bring back the car tax, which was art aberration. Admittedly, it was introduced by a Conservative Government, but even Conservative Governments make mistakes occasionally, and we hope. that that mistake will never be repeated. I rejoice, and throw my hat in the air.

Mr. A. J. Beith: I agree with one thing that was said by the hon. Member for Surrey, North-West (Sir M. Grylls) and disagree with another. I shall deal with the disagreement first. It cannot possibly be claimed that the Bill—which I support—shows that the Government believe in the lowest possible taxation; as the Government have made clear, it is a tax-neutral measure. I shall list some ways in which the cost could be recouped, but I do not think that the Government have claimed that the Bill does what the hon. Gentleman suggested. Back Benchers had better stick to the brief.
The Economic Secretary referred to the Japanese motor industry's inward investment in Britain. We hope that it will be one of the beneficiaries of this measure. The north-east takes pride in the success that Nissan has enjoyed there. Not everyone expected that to happen. Old


scars, the result of memories of the war with Japan, take a lot of healing, but the arrival of Nissan in the north-east, its great success and the great commitment of its work force are matters in which we take great pride. If one goes into a Nissan plant, one sees few Japanese workers there.
The large north-east work force has adapted to methods brought here from Japan—methods that themselves were adjusted to meet the British climate. They have set new standards, not just for the motor industry but for other industries. The result is that Nissan can claim that it has the best of a large available work force. Many people want to work for that company. They know that it is a good place to be.
The Bill will abolish an indefensible tax—a peculiar left-over from the old purchase tax system. Sooner or later, somebody has to get rid of it. It is arguable whether this is the best measure to choose at this time, but since the motor car industry needs help, it was a reasonable choice to make and therefore counts as one of the better points in the autumn statement.
The Chancellor of the Exchequer was at unusual pains to make it clear that there would be a comeback. He was uncharacteristically, as the hon. Member for Oxford, East (Mr. Smith) said, able to anticipate his Budget statement by suggesting that the money would be clawed back. In a normal Budget, there is often valorisation of excise duty on petrol or of vehicle excise duty. Although it does not occur in every Budget, the price is normally increased. Even if we ignore the possibility of the Chancellor doing that this year, we have to anticipate that this change will have a significant impact.
The Economic Secretary told us that he thought that vehicle excise duty might be increased by £31, if that route were chosen, which is slightly above my estimate. My estimate of what would happen with petrol was also an understatement. I reckoned that there would be 8p a gallon on petrol, if the increase were to be wholly obtained from petrol duty. It may be 10p a gallon. Opprobrium was heaped on the Liberal Democrats from time to time because we argued that, in order to tackle pollution, it might be necessary to increase the purchase price of petrol; we can now put all those remarks in context. If the Government combine some element of valorisation with recouping the cost of this measure from petrol tax, there will be a significant petrol tax increase in the next Budget.
The Government could consider company car taxation as another way of meeting the costs of this measure. By widespread consent, company car taxation is below the real value of the benefit that many company car users obtain from their car. If the money has to be found from some other form of vehicle taxation, it might be better to find it from company car taxation rather than from those who have the greatest difficulty in affording the cost of motoring.
I think in particular of many of my constituents; they live in a rural area, but the same can be said of people in other areas. They can only just afford to keep their old car going. For them, the annual bill for tax and insurance is the annual decision about whether to keep their car on the road. The decision about whether to keep their car also involves a decision about whether they can keep their job, or whether their wife can continue to work, or whether their son or daughter can continue with further education,

because they need transport too. The people who find it hardest to run a car are the ones who most depend on it because of where they live.
The Government must be careful to avoid transferring the tax that they have abolished on new cars, bought by people who can afford them, on to the backs of people who cannot afford it. It would be more logical if the tax were transferred to company cars where under-taxation is significant, as the Government have recognised by seeking to address that problem in recent Budgets.
We hope that this measure will have a significant impact on the future of the car industry. However, several hon. Members have pointed out that many people will not buy cars unless they have confidence in their own economic well-being and that of the country. It would be foolish to assume that this measure will have a dramatic effect. Only the growth of confidence in the economy can bring that about. We all hope that that will happen, but different views have been expressed here regarding whether the autumn statement will bring about a real growth of confidence in the economy.
To return to Nissan, inward investment has been based on the belief that this country will remain within Europe and the single market and, if it ever comes about, the single currency. The choice of this country by Japanese investors was based on our position within Europe, together with the particular advantages that we enjoy. One of those advantages is the English language, which is the primary foreign language for Japan.
Japan will not invest in this country if there is real doubt about our future in Europe. That is why we voted for the Maastricht treaty. That is why we find it difficult to accept the view expressed by the Labour Front Bench that they share our concern regarding the real dangers to the motor industry from a two-speed Europe.

Mr. Peter Griffiths: I welcome the measure. We all take pleasure in the abolition of a tax. I understand the point made by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) about the way in which this tax might be recouped in the coming months. His point about company vehicles very much echoes the representations that many hon. Members received only today from Transport 2000, the environmental group. I trust that the Government will seriously consider the impact of their decision on how they choose to recoup their lost revenue.
I hope that the Minister can give us an assurance about the price of new vehicles. We no longer have a special car tax; there will therefore be a consequential decrease in VAT. Should not the price of new vehicles manufactured within the European Community, either in this country or on the continent, be the same, wherever one happens to purchase a new car? The argument about the complications of the British taxation system leading to price differentials will no longer wash. Differences in the rates of exchange mean that, from time to time, there will be differences in the nominal price of vehicles, but that does not alter the real cost of a car. I hope that the Minister will be able to reassure us that there will be an end to customers being pushed into importing their cars in order to take advantage of lower prices for similar vehicles, particularly in Belgium.That will encourage people to return to British car showrooms.
This measure, by itself, will not regenerate the motor car industry, but it is a step in the right direction. I trust that the House will respond enthusiastically to this measure and that it will encourage the Minister to look for other ways to reduce the tax burden. With a request that he examine closely the way in which the revenue will be recouped and for an assurance of equal prices across our open frontier market, I welcome the Bill.

Mr. Andrew Mackinlay: I did not intend to participate in the debate. However, on behalf of my constituents, I was legitimately aggrieved when I heard the Minister, supported by the hon. Member for Surrey, North-West (Sir. M. Grylls), imply that this measure was a great step forward and would boost motor car sales in this country. I am not aggrieved because the Government are deluding themselves. I should be happy for them to continue to do so, were it not for the fact that their delusion is leading to a continued decline in Britain's manufacturing industry, especially the motor car industry.
I represent an area in which there is a Ford plant. The workers at the Aveley plant face the prospects of job losses, relocation and redundancy; also, many of my constituents work at Dagenham. Workers at Dagenham and other Ford plants have greatly contributed to increased productivity, only to find that their enthusiasm and dedication to promoting their industry has resulted in their being kicked in the teeth by a complacent Government who preside over a recession which has resulted in a significant decline in the motor industry.
I am concerned about the short-term working at many Ford plants. Vauxhall has also introduced short-time working because of the fall-off in demand. Short-time working is an enormous blight on the local economies which surround those plants. There is no doubt that the Dagenham plant and the Ford plant in Aveley were a major stimulant to the local economies in good times. However, short-time working and job losses not only depress the incomes of those who are laid off or put on short-time work; they ricochet through the local economy. We see that not only in the factories and small industries which supply the main plants but in the high street shops and corner shops.
The motor car industry in Britain must compete in a difficult environment to sell its products. That is having a deleterious effect on the economies of Essex and east London and is resulting in job losses for other people in the constituencies in those areas. It is unacceptable that the Government pretend that this measure is a great step forward and a great boost for the motor car industry. At the very most, the measure will limit the damage that has been done to such an important industry.
In case hon. Member twist my words or suggest that I am being ambiguous, I make it clear that I welcome the abolition of the tax. The hon. Member for Surrey, North-West said that the Labour Government had not imposed the tax; indeed, the Conservative Government imposed it. We must ask this question: if the abolition of the tax is to make such a significant contribution in boosting car sales, why was it not abolished weeks or months ago? Since we have fallen into a recession—or perhaps it is a depression—many people in and around my constituency have lost their jobs as a consequence of the decline in the motor car industry.
Many of us had a bruising experience on the night and morning of 9 and 10 April. The Government should bear in mind the fact that many Ford workers and other workers in the motor car industry were persuaded by the lie that to vote Labour would cost them about £1,250 a year. That was a downright electoral lie. It is legitimate tonight to say that, since 9 and 10 April, thousands of workers in the motor industry have lost much more than £1,250 as a result of short-time working. They will lose much more. Unhappily, some people have lost their jobs as a result of the continuing recession.
If the outcome of the election on 9 April had been different, we would have a Government who sought to stimulate demand in the economy. A Labour Government would have paid attention to the necessary promotion of the motor car industry, which would have been stimulated by the public works that that Government would have sponsored to create demand in the economy and get the building and construction industry back to work. Clearly, that would have had an immediate impact on demand in the motor car industry.
I feel most aggrieved on behalf of my constituents that the President of the Board of Trade promised at the Conservative party conference this year to intervene on behalf of manufacturers at breakfast, lunch and tea time. However, we must legitimately charge him this evening with not demonstrating any interest in creating new job opportunities in the motor car manufacturing industry in and around constituencies in Dagenham, east London and Essex, including Thurrock and Basildon, in which there is rising unemployment.
The President of the Board of Trade and the Government seem to be complacent. That has been demonstrated by Conservative Members who paraded this measure as some great breakthrough to create new job opportunities and to stimulate and promote the main industry in east London and Essex. It is nonsense. It would be wrong if I let the Minister get away with introducing the Bill without expressing the concern of my constituents—the Ford workers and workers in other motor manufacturing plants who have done much to increase productivity over the years only to find that they face a loss of income and job losses as we look forward to 1993.

Mr. Richard Burden: I will not detain the House for long because I know that it wants to make progress. Conservative and Opposition Members are unanimous on one point: we welcome the abolition of the tax. There is no doubt about that, and there is no fudging it.
We welcome the abolition of the tax. Industry in the west midlands, where I come from, has called for this measure for a long time. Trade unions and both major political parties have called for it for some time. So the abolition of the tax is welcome. I have little doubt that it will give a necessary boost to the motor industry. However, the size of that boost is highly debatable. Today a figure of 70,000 cars has been bandied about. The Society of Motor Manufacturers and Traders gave a figure of about 60,000 cars. But they are only estimates.
There is no doubt that the price of a car alone does not determine whether the motor industry thrives. We have already had a substantial reduction in prices. We saw the first reduction in the special car tax in the Budget, and a


price reduction arose from the VAT on top of that. Many deals were undertaken over the summer. All of them have provided some boost to the industry. I will not deny that, and I am sure that the industry will not deny that. But it is not enough, because in a climate of recession and rising unemployment the idea that the removal of the special car tax, or any other tax, will regenerate either the car industry or manufacturing industry in general is totally misguided.
The car industry has been doing a magnificent job. The investment that Rover has put into the Longbridge plant, in Northfield, is magnificent, as are the efforts of the work force in changing their working practices. The training initiatives are to be applauded, too.
Both sides of the industry are keeping up their end of the bargain. Component manufacturers have been mentioned tonight, and they, too, have been doing what they can to compete and to thrive. But in a climate still dominated by the dead hand of recession, what they can do is limited.
After the autumn statement, growth will still be pitifully low during the coming year. Unemployment will rise; even the recorded level will rise to more than 3 million. Investment has plummeted in recent years, and at best is likely to stagnate next year. In such a climate, the efforts of the industry and of the people who give their lives to that industry can be only partially successful.
In an earlier intervention I mentioned the recent launch of a campaign by the Engineering Employers Federation. I had not intended to mention that again, but I feel that I must, because it is worrying that either Conservative Members have not bothered to read what the federation says, or they have not been able to understand it. So I shall quote from the press release by the director general of the federation—not a body which historically has been over-supportive of the Labour party—about whether his interpretation of the document is the same as that of Conservative Members, who believe that the federation applauded what the Government are doing.
Referring to the Department of Trade and Industry, the press release says:
We need a department with vision and a clear commitment to the success of UK plc. We stand ready to give such a department, which should be part of the DTI, our full and enthusiastic support, but in recent weeks industry itself has been doing the job of the DTI—fighting for a voice and fighting for action within Government. I believe we have a right to expect a more effective and committed champion. If the DTI lacks the vision, the competence or the determination, or if it is simply too busy with short-term issues to deal with long-term strategy, perhaps we should look to the creation of a specialist Treasury section to do that vital work".
There are two possible interpretations of that press release. I suppose that it would be possible to say that the Engineering Employers Federation is very unhappy with the DTI, yet totally happy with the performance of the Treasury—but I do not think that that would be correct. It would certainly suggest an unfortunate division in the ranks of the Government. The only other interpretation is that a major representative organisation of manufacturing industry considers that the Government are not delivering or keeping their side of the bargain—that they are not doing what is necessary to stimulate manufacturing industry.
The Government are still obsessed with short termism. They are not developing the kind of long-term strategy

which manufacturing industry needs. To continue in that way is a recipe for disaster, not only for big manufacturers such as Rover and Ford but for hundreds and thousands of smaller firms—component manufacturers and so on —which depend on manufacturing industry.

Mr. Roy Thomason: Does not the hon. Gentleman agree that the Engineering Employers Federation welcomed the autumn statement as a substantial boost to the economy?

Mr. Burden: I have read the document from the Engineering Employers Federation launch, which took place this week, after the autumn statement. Its purpose was to suggest that the measures in the autumn statement, welcome though they may be—the Opposition have welcomed some of them tonight—were nowhere near enough to provide the boost or, more importantly, the long-term strategy which manufacturing industry needs. That was the message of the Engineering Employers Federation.
There is nothing new in that, although the document is new. The federation has been saying such things for months—in some cases, for years. The trade unions have certainly been saying such things for years. If the Government ever intend to listen to what industry says, they need to start listening now.
If we are to develop such a strategy, it must be done at local, national and European level. I have said something about national strategy, and it is worth recalling that efforts are being made even now by local authorities. My local authority, Birmingham city council, and others are trying to do what they can to work with the component suppliers and with firms such as Rover to improve product development, training and research and development. Those efforts need support from central Government. At the moment there is at best a hands-off approach and at worst something even worse: those are the same local authorities which suffer from Government restrictions on local authority autonomy, and on their spending—

Mr. Deputy Speaker (Mr. Michael Morris): Order. I hope that the hon. Gentleman will not continue with the local authority dimension, because the subject of the debate is very specific—the removal of car tax.

Mr. Burden: I am grateful to you, Mr. Deputy Speaker, and I shall not dwell much longer on the issue. Work is being done at local authority level to regenerate manufacturing industry, and it is being co-ordinated through organisations such as MILAN—the Motor Industry Local Authority Network. I believe that such organisations deserve support from central Government.
Such a strategy also has to be adopted at European level. Work is going on in the European Parliament—spearheaded by the socialist group. Reports produced by a working party headed by Carole Tongue MEP are aimed at producing the kind of European strategy which the motor industry needs. I hope that our Government do not adopt a hands-off approach but will become involved and will contribute.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) talked about possible ways in which revenue lost as a result of the abolition of the car tax could be recouped, and mention was made of company car taxation. It is fair to say that the overall level of company car taxation in Britain today has still not completely managed to grasp the


level of perks, where perks exist. Yet the approach to such taxation in recent years has singularly failed to tackle genuine perks; the people who use company cars as a tool of their trade have been the hardest hit.
The simple reason for that is the way in which the tax has been progressively jacked up on the mere possession of a company car. That is where the biggest tax burden has fallen. Tax on the use of such cars has not increased especially, so that a company director who gets all his private mileage paid for suffers some taxation, but he does reasonably well on his real gains, because he is taxed only at the same level as a sales rep or someone similar who has to pay for every private mile that he does.
If we are to tackle the issue of company car taxation and perks, it is important that our efforts should be targeted on the perks and not on people who happen to have a company car yet who contribute to every private mile that they drive. It would be fair to sort out the company car taxation system to take account of that. The debate is about much more than fairness; it is about effectiveness, efficiency and the regeneration of manufacturing industry.
I shall close as I started. The abolition of the lax is welcome, but it does not go even half far enough. We need a major fundamental change in Government policy to provide the kind of long-term support, the strategy and the intervention that manufacturing industry in the midlands and elsewhere so desperately needs.

Mr. Bob Cryer: I will be brief as other hon. Members wish to speak on a range of issues. I do not intend to detain the House for long. However, it is worth pointing out that although the abolition of car tax is welcome, it would be more welcome if the revenue was to be gained by restoring some of the £26 billion of tax concessions that have been given to the wealthy top few per cent. by successive Conservative Governments.
There are difficulties about abolishing car tax. The proposal is designed to stimulate manufacturing industry. Since 1979, we have lost 2·5 million jobs in manufacturing industry. The abolition of the car tax should have been coupled with a 100 per cent. tax allowance in respect of corporation tax on investment in plant and machinery. That was the position under the last Labour Government. This Government are very fond of making comparisons, but they must be aware that we allowed 100 per cent. tax allowances for specific investment. The allowances were therefore targeted.
A problem with abolishing car tax is that it will benefit not only cars manufactured in this country but imported cars. So far this year, we have a balance of trade deficit of approximately £10 billion. The proposal will therefore have an adverse effect as well as a beneficial effect. However, I believe that the beneficial effect will be marginal because there is such a fear of debt in the nation that people are very hesitant about incurring further debt to buy new cars or any new commodity. Fear of mortgage repossession is also widespread. People now realise that an English man or English woman's home is not always their castle if they fall into the hands of the wrong building society.
The right hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to Japanese investment and whether the abolition of the car tax would stimulate that investment.

The Japanese invested here because of relatively cheap labour. They did not necessarily invest here because of Maastricht. Maastricht has not gained us one extra job —nor will it.
We must recognise the dangers of such an approach. Design and development, which are crucial in our engineering industry, will be left to another nation. The power trains of Japanese cars are designed in Japan, not in this country. Incidentally, the Japanese can invest so heavily in manufacturing industry and in car design and development because they do not waste money on a defence industry as we do. While we spend 4 per cent. of our gross domestic product on defence, the Japanese spend less than 2 per cent.
It is potentially damaging for any country to invest in manufacturing here because the decision making is carried out in the nation state that is investing. In addition, our people are not necessarily trained in design and development, because that may be carried out in the manufacturer's main base. If, as is the case in Japan where car manufacturing companies are retrenching because the investing country is experiencing a recession—although, in
comparison to ours, a very minor one—the main manufacturing plants will not be diminished. That will happen to plants held in other countries—for example, in the United Kingdom.
We hope that the abolition of the car tax will stimulate our engineering industry in general. If our engineering industry diminishes, and in particular the machine tool industry, that will affect the machines that make the machines. Our manufacturing ability would therefore be badly damaged.
If overseas companies invest in the United Kingdom, local component manufacture will not be confined to the United Kingdom. It will be extended to all the EC member states. I remind the Minister that there are still many hidden subsidies in those member states which produce unfair competition against which our manufacturers cannot compete.
Although the abolition of the car tax may have a marginal effect, and we will certainly not vote against this modest stimulus, I believe that it will not be sufficient. The engineering industry, which is such an essential part of the car manufacturing industry, will still lie in the doldrums. There is testimony to that virtually every week as there is a haemorrhage of jobs in all kinds of industries—in services, banking, finance, component manufacture and in the car industry itself. Until that trend is reversed, abolition of the car tax will not produce the necessary consumer-led demand, because there is simply not sufficient confidence in the Government.

Mr. Nelson: With the leave of the House, I shall reply to the debate. Hon. Members have welcomed the proposal. There was a warm welcome from the Conservative Benches and a miserly one from Opposition Members. I regret that, because this proposal is a considerable element of the autumn statement and it has been widely welcomed by industry generally and by representative bodies of the motor industry.
I will try to answer as briefly and as directly as possible a number of the points that have been raised. The hon. Member for Oxford, East (Mr. Smith) has an important car interest in his constituency, He accused the


Government of a semi-detached stance on Europe. If the Government's stance is semi-detached, the Opposition's stance is positively schizophrenic. The hard-fought agreement on Maastricht was the agreement that my right hon. Friend the Prime Minister sought and wanted and we obtained a majority in the House for it. In the recent debate, the Opposition went back on their commitment for the basest of political, opportunist reasons.
The hon. Member for Oxford, East said that the proposal provided no extra fiscal stimulus. As I said in my opening remarks, the proposal was intended as a transfer towards a tax on use rather than on purchase. The tax yield forgone in the remainder of this financial year is £100 million and that is not being recouped by additional motoring taxes.
The hon. Member for Oxford, East expressed surprise at the novelty of my right hon. Friend the Chancellor of the Exchequer announcing that he would seek to recoup the revenue in motoring taxes next year. I believe that my right hon. Friend was being responsible. He would not want to give the impression in the current circumstances that fiscal policy can be relaxed unduly. The substantial package of measures that he announced in the autumn statement, including the abolition of car tax, has a cost tag attached to it next year and beyond that will have to be met.
The hon. Member for Oxford, East and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) wanted to know the cost if the cost of abolition were added to petrol. The answer is 2·2p on leaded petrol and 1·8p on unleaded and diesel.

Mr. Andrew Smith: Is that a litre or a gallon?

Mr. Nelson: A litre.
My hon. Friend the Member for Surrey, North-West (Sir M. Grylls) gave a warm welcome to the Bill. He referred to the revival of the car industry which has undoubtedly taken place, the importance and size of inward investment and the importance, to which I also referred, of the component sector. He said that the car tax must never return and he, like others, poured some scorn on the existence of the tax.
No tax is welcome. However, it is fair to point out that the car tax has been a fairly cost-effective tax to raise. it cost £700,000 a year to administer and involved the full-time employment of four staff and 20 man years. Considering the yield, in years gone by and even in this year, that is relatively cost-effective.
The right hon. Member for Berwick-upon-Tweed referred to the implications of recouping and said that it might be better to put the cost in part or in whole on company car taxation. That point was also made by other hon. Members. That is, of course, a judgment for my right hon. Friend, but what the right hon. Gentleman has said will be noted.
I warmly concur with the sentiments of the right hon. Member for Berwick-upon-Tweed that Britain's future in Europe is essential if we are to maintain and attract inward Japanese investment. There must be no question of that, given the flows of investment, and there really must be division across party lines on the importance of that investment. Despite what the hon. Member for Bradford, South (Mr. Cryer) said about design of manufacture, there

must be no doubt that this is a welcome haven for world-wide investment. I mentioned north Wales, but there are other examples, particularly in the north of the country. The extent to which investment has revitalised those areas is very exciting for the future. It has been a great success story, and we should welcome and applaud that investment and succour it for the future.
My hon. Friend the Member for Portsmouth, North (Mr. Griffiths) would like the cost of cars to be on a more similar basis throughout the EC. The Government are currently reviewing car prices throughout the Community and are keen to encourage the industry to co-operate with current European Community initiatives to produce greater price transparency. Abolition of the tax means that we will have almost the lowest rates of tax on cars in the European Community. The rates range from those in Denmark, which has a VAT rate of 25 per cent., plus an additional sales tax of 105 per cent. on the first 34,400 krona, and 180 per cent. tax on the balance, down to those in Germany, which has a 14 per cent. rate of VAT and no additional car tax.
With the minimum rates of VAT that are being introduced, we will see a standardisation of the minimum rates, but at the moment there is considerable variation in those basic rates and in the supplementary additional sales taxes, but we are looking at that matter.
Dealing as expeditiously as I can with the remaining important points, the hon. Members for Thurrock (Mr. Mackinlay) and for Birmingham, Northfield (Mr. Burden) felt that the measure would not boost industry. The hon. Member for Northfield, who has Rover Longbridge in his constituency, felt, as did others, that the measure alone would not suffice and that a broader regeneration and inspiration of manufacturing industry were necessary.
The last thing that industry needs at this time is a public expenditure programme which will increase its burden of taxation and borrowing. Any Chancellor has to make a major judgment about the size of public expenditure. My right hon. Friend the Chancellor has come forward with a major package to restore confidence in the housing market, to promote exports, and, in particular, to target the car manufacturing industry.

Mr. Andrew Smith: indicated dissent.

Mr. Nelson: The hon. Member for Oxford, East shakes his head, but major amounts of public money have been allocated for the revitalisation of British industries. We all hope that they will have the effect we intend.
The hon. Member for Northfield spoke about company car taxation and urged us to hit the perks rather than continue with the present regime. Again, that is a matter for my right hon. Friend's judgment in the Budget, but what the hon. Gentleman said will have been noted.
The hon. Member for Bradford, South spoke about capital allowances, which he said should have been raised to 100 per cent. He will be aware that, in the statement, tax incentives for investment included an increase in capital allowances in the first year to 40 per cent. for 12 months for most plant and machinery. The Chancellor spelt out very clearly why the Government retain the view that they have held for some years, that they do not wish, by reintroducing capital allowances, to introduce artificialities into the spending and investment decisions that people make. It is far better to keep down the overall burden of taxation and, in a more perfect market, enable people to


take decisions about the allocation of capital and investment which will earn sufficient return and promote profitability.
Abolition of the car tax will have a very good stimulus upon the market. If the House does not accept my intentions in that regard, I refer to the statement of Mr. David Gent, director general of the Retail Motor Industry Federation, who said:
The motor industry and its customers can now look forward to a more certain future and an increasingly brighter 1993.
Sir Hal Miller, the chief executive of the Society of Motor Manufacturers and Traders Ltd., said:
we now look forward to leading the way out of recession.
Those are important leaders of a major industry for our country. They welcome the measure that was announced today. I am sure that it will have a beneficial impact, and I hope that the House will approve it.

Question put and agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Wood.]

Bill immediately considered in Committee.

[MR. MICHAEL MORRIS in the Chair]

Clause I ordered to stand part of the Bill.

Clause 2

CONSEQUENTIAL AMENDMENTS

Motion made and Question proposed, That the clause stand part of the Bill.

Mr. Andrew Smith: The effect of subsection (5)(1A) will be to require certificates relating to vehicles leased to the handicapped to be retained. Why is that? What does it mean? Will the Minister assure me that that in no way adversely affects access to and use of cars by disabled people?

Mr. Nelson: I can give the hon. Gentleman that assurance. Manufacturers of vehicles which are leased to the handicapped, as is done through Motability, are required to hold a certificate issued by the lessor, which is exclusively Motability, that the vehicle is intended to be supplied zero-rated for VAT purposes, in which case the vehicle can be supplied free of car tax. But if the vehicle is later supplied in other circumstances—for example, within three years—the taxes would become payable. Therefore, it is necessary for the certificate to be retained as proof of the tax-free status of the vehicle. It is really for VAT purposes rather than for car tax purposes and will not have any impact, adverse or otherwise, on the availability of such cars to the disabled.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clauses 3 to 6 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 75 (Third Reading), and agreed to.

Bill accordingly read the Third time, and passed.

PETITIONS

Pit Closures

Mr. Bob Cryer: I am delighted to be able to present this petition against pit closures, which has been collected by members of the Bradford, South Labour party and has reached nearly 5,000 signatures. The boxes that have just been brought into the Chamber are not connected with my petition, Mr. Deputy Speaker.
On 31 October, in the centre of Bradford, in just over two hours we collected more than 2,000 signatures from people who willingly signed the petition and enthusiastically supported it as a gesture of support for the miners. It reads:
To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The humble petition of the citizens of the United Kingdom, particularly the citizens of Bradford and the surrounding areas—
Showeth that the closure of more pits in Britain will cause terrible hardship and destroy many mining communities and tens of thousands of jobs in industry; that Britain's manufacturing strength was built upon coal; that coal reserves are available that would last for hundreds of years and are essential for our industrial renewal; and that British coal is the most suitable coal available for the generation of electricity.
Wherefore your petitioners pray that your honourable House will instruct the Government to reverse the pit closure programme at once, to stop the importation of subsidised coal from abroad, to suspend opencast operations and to adopt new policies that put people before profits and protect the environment and the quality of life that depends upon it. And your petitioners, as in duty bound, will ever pray, etc.

To lie upon the Table.

Devonport Dockyard

Mr. David Jamieson: I wish to present a petition containing 33,661 names of the residents of the Plymouth area. The House will be aware of the uncertainty over the future of the royal dockyards as we await the award of the contract for nuclear submarines. That contract is vital to the maintenance of jobs in Devonport, Plymouth and the south-west of England. The petition reads:
To the honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament Assembled, The humble petition of Plymouth area residents sheweth: Devonport Dockyard is the largest industrial complex in the south west of England and is responsible directly and indirectly for 22,600 jobs in the Plymouth area and as such is crucial to the economic well being of the region. The future survival of the Devonport Dockyard is dependent on the actions of Her Majesty's Government.
Wherefore your humble Petitioners pray that your honourable House urges Her Majesty's Government to guarantee the continued survival of Devonport Dockyard and Naval Base in its present form.
And your petitioners, as in duty bound, will ever pray etc.

To lie upon the Table.

Electoral Districts (Shetland)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]

Mr. James Wallace: I am pleased to have the opportunity to raise on the Adjournment the proposed boundary changes in electoral districts in Shetland and the proposal to incorporate the existing Bressay island division into one of the Lerwick burgh wards—a move that has generated resolute opposition among the islanders. It is fair to say that they have enjoyed support for their cause from many people throughout Shetland.
The island of Bressay is opposite Lerwick and is the piece of land that makes Lerwick harbour such a good natural haven. It has a population of 353 and an electorate, on my calculations, of 255. Their case may seem small, given the great affairs of state that are often debated in this Chamber, but local government electoral divisions are a responsibility of the House, and it is not an unreasonable test of the health of our parliamentary democracy to find out how it manages to discharge that responsibility and how sensitive it can be to the legitimate democratic interests of a small community in one of the furthest extremities of the United Kingdom.
First, I give a brief history of the background to the debate. It starts with the review of local government boundaries required by section 16(2) of the Local Government (Scotland) Act 1973. That review was initiated by the Local Government Boundary Commission for Scotland, which expressed an initial view that Bressay should be incorporated within the Lerwick division because its electorate was 60 per cent. below average. That view was widely rejected locally and a considerable number of representations were received by the commission in response to it and to some of its other proposals.
Given the contentious nature of the proposals, the assistant commissioner, Mr. Archibald Martin, was appointed. He visited the area and a local meeting was convened in Lerwick in June 1991 when interested parties and organisations—myself included—gave evidence to Mr. Martin.
On that occasion, Shetland Islands council made a formal and reasoned submission against the proposed linkage of electoral divisions, as did the local councillor, Mr. James Irvine. A careful study of today's Order Paper will reveal early-day motion 868, in which he secures an unsought tribute from the hon. Member for East Lothian (Mr. Home Robertson) and another.
Dr. Jonathan Wills gave evidence on behalf of the Bressay community council, as did the chairperson of the Bressay school board, Mrs. Anne Bateson, and the convenor of Shetland Islands council, Edward Thomson; and, significantly, the chairman and vice-chairman of Lerwick community council also voiced their opposition to the proposed change.
Notwithstanding the force of those representations—it is significant that no one was prepared to defend the boundary commission's proposals—the commission unfortunately accepts the assistant commissioner's recommendation that Bressay should be linked with the Lerwick Harbour division.
After the statutory period, during which appeals were made to the Secretary of State for Scotland, he tabled the Shetland Islands Area (Electoral Arrangements) Order 1992, giving effect to the boundary commission's proposals. That order comes into force for all preliminary proceedings in connection with the islands council's elections on 10 October 1993. It will take full effect on the date of the next islands council election on 5 May 1994. It will be apparent that there is ample time for the Minister and the Secretary of State to reconsider the terms of the order without giving rise to any administrative disruption or inconvenience.
I shall summarise the case for Bressay's separate representation, notwithstanding its relatively small electorate. First, Bressay is predominantly a rural area, while Lerwick is a town and obviously an urban area. The interests of a rural division do not necessarily accord with those of a town division. I have no doubt that any councillor elected would work hard to reconcile those competing interests. During the public hearing the councillor to be elected was frequently described as a "hybrid councillor". Nevertheless, a 2:1 weighting of electors in favour of the Lerwick town ward would be a fact of electoral life.
It is not too fanciful to think of an issue that could easily split on a rural-town divide. Housing, economic development and environmental health were all cited at the local inquiry as examples of where there could be ready conflicts of interest. If a councillor chose to side with his or her majority in a town part of the ward, and even if every elector in Bressay voted against that councillor at the ensuing election, they would still find themselves greatly out-voted. That is no recipe for providing local confidence in an effective local democracy.
Secondly, Bressay is a thriving community with a distinctive community identity. The first election for the Bressay ward took place 101 years ago. Although the island's population fell dramatically in the years after the first world war, it retained its separate representation—something which I suspect may have been instrumental in no small way in helping to sustain the islands community's distinctive identity. On local government reorganisation and the inception of the Shetland Islands council in the mid-1970s, Bressay continued to secure its separate representation to the council, albeit that at that time the size of the population and electorate of the island was smaller that it is today.
The island has its own community council, its own school board and its own distinctive social and community events. Its sons and daughters, who leave the island to work "overseas"—perhaps as close as Lerwick, but often further afield—still retain a tremendous loyalty to their native isle. In recent times, there have been signs of increased house building and a rising population, something that has been assisted by a first-class ferry service.
In contested local elections, the turnout is traditionally high, which speaks eloquently for the vitality of civic life on the island. Moreover, when a public meeting was called on the island on the eve of the assistant commissioner's hearing to debate the commission's proposals, some 30 per cent. of the electorate turned out. I am sure that the Under-Secretary of State for Scotland can do a quick relative calculation: I wonder when he was last aware of a


public meeting in Edinburgh, West that managed to attract the attention of 17,700 of his electors to debate a matter of public policy.
In addition to those considerations, one must also consider the legal position. Schedule 6 to the relevant statute, the Local Government (Scotland) Act 1973, requires the boundary commissioners to provide that
the number of local government electors shall be, as nearly as may be, the same in every electoral area".
It also states that regard is also to be had to
the desirability of fixing boundaries which are and will remain easily identifiable
The schedule specifically states:
The strict application of the rule"—
the numbers rule—
may be departed from in any area where special geographical considerations appear to render a departure desirable
Can there be any more obvious geographical consideration than a rural island community separated by water from a busy county town?
The arguments that I have advanced so far provide a substantial case for Bressay's separate representation on the Shetland Islands council. I recognise that I am asking not only for that argument to be accepted but for the Secretary of State to bring forward a new, revised order. I am asking him to go against the recommendations of the boundary commission in this case, and I appreciate that he would not do so lightly. However, I believe that, under section 17(2) of the 1973 Act, the Secretary of State has the power to modify proposals made to him by the commission.
In my submission, there are three compelling reasons, in addition to those to which I have already referred, why the Secretary of State should exercise his discretion and modify the commissioners' proposals to allow Bressay to continue as a separate electoral division.
First, the issue does not give rise to any partisan political dispute. The reluctance of a Secretary of State to interfere with the recommendations of the independent boundary commission would be proper and understandable if, by doing so, he opened himself to the charge of gerrymandering for party political advantage. That is not the case here, because Bressay has a long tradition of electing independent councillors, and the position of the islanders has attracted cross-party support.
Secondly, if, as the assistant commissioner has maintained, the clinching argument is Bressay's low electorate, it might be wise to ask the simple question: who would be most prejudiced by a decision to maintain an electoral division of 255? The answer is those wards with a much higher electorate where, arguably, voters could claim that their vote in returning an island's councillor was disproportionately devalued in relation to the vote of a Bressay elector. Hon. Members may think that most of those voters live in Lerwick, where divisions can be between two and three times as large as that in Bressay. However, far from complaining about that, the chairman and vice-chairman of Lerwick community council, and its members, went along to the public inquiry to support the islanders' claim. As I have already said, Bressay's case enjoys support throughout Shetland.
The third and most important reason why the Secretary of State should exercise his discretion is what has happened since he received the boundary commissioners' report, because the same Local Government Boundary Commission, under Lord Osborne's chairmanship, has produced a report on the electoral arrangements for

Orkney Islands council. It proposes, one ward, Rousay, Egilsay and Wyre, with an electorate of 225, and another, Shapinsay, of 268, which is similar to that being argued for in Bressay.
Indeed, if I may pursue the Shapinsay parallel, the original proposal was to incorporate Shapinsay in a Kirkwall burgh ward. That was rejected, admittedly by a different assistant commissioner, in the following terms:
The case for separate respresentation having been accepted in the past, I have approached this matter on the basis that the question to be answered is whether circumstances have changed to an extent justifying a different conclusion on this occasion. In my view they have not. The general perception in Orkney is that the islands have special interests and community ties which can properly be distinguished from those of the mainland, even those parts of the mainland separated from them by relatively narrow stretches of water. It would be difficult to devise any system of linking the islands to parts of the mainland which did not imply that the island electorate would be in a minority in the new divisions, and this would be widely regarded as unsatisfactory and as undermining some distinctive characteristics of Orkney society.
The commissioners accepted that recommendation and decided that Shapinsay should not be linked with the mainland, and that Rousay, Egilsay and Wyre should be maintained in their current constituted division because of the strong reasons put forward in the report. Those strong reasons, which I have quoted, will not be lost on the House, and I trust that they will not be lost on the Minister.
Clearly, what the commission was prepared to support strongly in the case of Orkney it has rejected in the case of Shetland. I need not labour the point because it is reasonably self-evident. Instead of highlighting the inconsistency of the boundary commission, I would rather that the Minister would draw the positive lesson from that; the Secretary of State's attention should be drawn to a contemporary finding of the boundary commission in almost identical circumstances which would be sufficient to justify him revising the order.
The arguments in favour of Bressay's separate representation are overwhelming. I ask the Minister to consider them seriously. There is nothing wrong with admitting that he perhaps got it wrong. If the Minister were to change the order, it would be widely acclaimed throughout Shetland. After all, this is the Government which, in recognising the paramount wishes of certain islanders in the south Atlantic, incurred more than £3 billion of post-conflict public expenditure. Separate representation on Shetland Islands council is a small price to pay to meet the wishes of the islanders of Bressay and to give victory to the campaign of the Bressay residents to "let Bressa be".

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on winning the ballot for the Adjournment debate and on the assiduous manner in which he has represented the interests of his 255 constituents on the island of Bressay. We do not normally debate the orders which implement new local authority electoral arrangements, because Parliament has decided that the final stage of the lengthy and detailed consultation process should be undertaken by executive action by my right hon. Friend the Secretary of State.
I welcome the debate, however, because it is proper that Parliament should give attention to such important matters from time to time, and it is only right that doubts about the commission's conclusions should be aired in this way.
The Local Government Boundary Commission for Scotland has been engaged for almost four years now in conducting reviews of local electoral arrangements for all the regional and islands authorities in Scotland. As hon. Members will appreciate, that was a massive task as these have been lengthy and painstaking reviews which have involved an enormous amount of public consultation and debate. The commission should be congratulated on the way in which it carried out this difficult task, especially in view of the resistance which changes of this sort often generate.
I recognise that some of the hon. Gentleman's constituents will be unhappy at what they perceive as an unjustified change recommended by the Local Government Boundary Commission for Scotland. But, as I shall explain, there is a wider interest involved. I am confident that the commission has been pursuing that wider interest for the benefit of all electors in Scotland and of all electors in Shetland.
The Local Government Boundary Commission for Scotland has been set up by Parliament with the task of conducting regular reviews of local electoral arrangements. It is important that we do not lose sight of the fact that those regular reviews apply to the whole of Scotland. The commission's recommendations must be consistent, as they apply in for example Dumfries and Galloway, the city of Glasgow, Fife or the Highlands, just as they apply in Shetland. There are no grounds for saying that one part of the country should be treated specially or differently from the rest, because Parliament has laid down the rules that the commission must follow. Those rules are designed to achieve a balance in the best interests of the whole electorate, not the special interests of a particular faction or community.
Those clear criteria laid down by Parliament make it possible for the commission to discharge its duties with a minimum of political pressure and interference, which is important to allow us to maintain the basic structure of our democratic traditions. The commission has a right to interpret the rules as it sees fit and it is answerable to the courts in that respect, but it has no right to disregard the rules. If it does so, it will be answerable to the courts, although there is no way in which my right hon. Friend the Secretary of State would be willing to countenance recommendations that do not conform to the rules.
One of the main purposes of the rules that is measurable and unambiguous is to achieve electoral parity. It is important that, in the election of members of a local authority, the weight of one resident's vote should be broadly the same as that of another. Obviously, it is impossible to get precise arithmetical parity every time, as other factors must be taken into account. Community interests would rank highly among those but they in turn should not be allowed to distort that fundamental democratic objective.
At the start of the review, Bressay was 60 per cent. below parity while the seven Lerwick divisions were on

average 19 per cent. above parity. I shall explain that by looking at the electorates taken from the current electoral register for that part of Shetland.
At present, the smallest electoral division in Lerwick has more than 600 voters. Two electoral divisions have more than 1,000 voters. But Bressay—separated by about half a mile of water from Lerwick—has just over 250. That is hardly fair. It should come as no surprise that the commission took a long, hard look at that situation. Put another way, if that were maintained, the weight of a Bressay elector's vote would continue to be three times that of a Lerwick elector, which would hardly be fair. As a consequence of the review the nine divisions covering Lerwick and Bressay together are estimated to have electorates on average just 2·5 per cent. above parity. That is much more equitable and the commission has done well to achieve such a balance, which also benefits all the electorate throughout Shetland.
The commission thought long and hard about that proposal before it was published. One of the considerations that doubtlessly weighed heavily would have been the community one. The commission would also have been aware that it can take account of special geographical considerations when formulating its proposals. In that regard, however, the Commission would have noticed that, although Bressay is an island, it is separated from mainland Shetland only by a very short distance and there is a five-minute ferry service every hour from 7 am until 11 pm on weekdays and until 1 am Friday and Saturday nights. That service has recently been significantly improved by a new and bigger vessel. In addition, all the secondary school children from Bressay attend school in Lerwick, and the health and emergency services are all provided from Lerwick.
There are therefore strong grounds for the commission having seen Bressay as much more closely involved now with Lerwick in the community sense than it has ever been in the past. Nor do I have any fears that Bressay voters' interests will be rendered secondary to those voters who live in Lerwick and with whom they will share a representative on the Islands council. In my experience, such councillors are particularly sensitive to the needs of such sections of their constituents, especially if they are in a minority.
Bressay is now a dormitory unit of Lerwick in terms of transport, employment and education. I assure the hon. Member for Orkney and Shetland that I have every reason to suppose that a councillor representing Bressay will be every bit as sensitive to their interests as the hon. Gentleman.

Mr. Wallace: I have listened to what the Minister has to say. He must have heard the quote that I gave from the Orkney boundary commission review, and the almost identical circumstances of Shapinsay in relationship to Kirkwall. Assuming that the boundary commission has worked consistently in the interests of Scotland, as the Minister said, how is it that the two boundary commissions reached almost diametrically opposed decisions within four months of each other?

Lord James Douglas-Hamilton: That is easy—the circumstances are entirely different. The ferry service between Bressay and Lerwick on a new and bigger ferry takes five minutes and runs hourly from 7.15 am to 11 pm, and to 1 am on Fridays and Saturdays. The ferry between


Shapinsay and Kirkwall takes infinitely longer—30 minutes—and occurs only six times a day, between 9.45 am and 5.30 pm. Therefore, there is no possible comparison in terms of access and transport.
The hon. Gentleman sought to make a comparison between Bressay and Shapinsay, but the commission decided that the different considerations justified a separate electoral division with a below-quota electorate. Such a comparison only serves to demonstrate how dangerous comparisons can be because of the essential difference between the nature of the ferry services.
Having made its proposals, the commission provided every opportunity for local discussion and consultation, as required under the legislation. All the representations and comments submitted to the commission were considered carefully. As a consequence of those representations and as a sign of how seriously they were viewed, the commission requested the Secretary of State to appoint an assistant commissioner. Mr. Martin, a former regional council chief executive, with extensive relevant experience in such matters was appointed assistant commissioner. The inquiry took place in Lerwick on 27 June 1991.
Every opportunity was provided for views to be expressed and comments made. The assistant commissioner is entirely independent of the commission and he submits his report according to how he assesses the case. He does not always agree with the commission. The inquiry also considered another of the commission's recommendations for Shetland that dealt with an adjustment to provide a division of Tingwall, Nesting and Lunnasting, and another consisting of Whiteness and Weisdale, on which the assistant commissioner disagreed with the commission. The commission subsequently accepted his advice.
However, the assistant commissioner concluded that the proposal to link Bressay with the Lerwick Harbour division was "appropriate and practical". The assistant commissioner's detailed report, which also includes the written statement submitted to the inquiry by Dr. Jonathan Wills on behalf of Bressay community council, has been included in full in the commission's report to the Secretary of State. That allows the full picture before the commission to be available to the public and shows that the assistant commissioner attached significant weight to Bressay now being a commuter region for Lerwick. The Commission's final recommendations to the Secretary of State maintained that proposal.
As the legislation requires, the Secretary of State allowed some time for further representations to be made. Representations were made but they did not say anything new or add to what had already been presented to the commission and the assistant commissioner at the public inquiry. As the commission had carried out its statutory function according to the legislative requirements and as its recommendations, had been endorsed by the assistant commissioner following a public inquiry, my right hon. Friend concluded that he had no grounds for overturning its recommendations, for two reasons.
The first reason concerns the commission's independence. My right hon. Friend recognises the fundamental importance of the commission being free of political control. Were that not so, we could not have confidence in our democratic arrangements. Provided that the commission carries out its duties correctly, its conclusions must command support; otherwise, there is no justification for its existence.

Mr. Wallace: Since Parliament has given the Secretary of State the power to modify the boundary commission proposals, in what circumstances would the Minister envisage the Secretary of State using those powers?

Lord James Douglas-Hamilton: They would have to be extremely serious circumstances, possibly involving irregularity. The Secretary of State has such powers, but I am not aware of his ever having used them. If the hon. Gentleman can cite an example, I shall be happy to consider it. In this case there are no grounds whatever for him to exercise the powers, because of the need for consistency.
Changes, particularly those of the sort generated by boundary commissions, are often initially deeply unpopular, as they are in this case with the hon. Gentleman's 255 constituents; but if the Secretary of State were prepared to overturn recommendations that have been made after due process of the correct procedures, simply as a result of special pleading from whatever quarter, he would be abandoning every prospect of consistency. We would quickly reach an impossible situation if the Secretary of State gave way to such pressure.
Similar pressures and claims would arise in other parts of the country, and the Secretary of State might find himself subjected to legal challenge if he did not give way in every case. How would he handle conflicting claims from special interests, none of which were in agreement with the commission's recommendations? The result would be chaos. There would be little justification for the commission carrying out its role at all.
As I said at the outset, I recognise the strength of local feeling which a change of this sort can generate; and I congratulate the hon. Gentleman on pursuing his constituents' interests as far as is possible. Broader issues are, however, involved, and the commission must have due regard to them. I have confidence that the revised arrangements for local representation will be to the benefit of electors generally in Shetland. I am also confident that, when all the reviews of the electoral arrangements for the whole country have been completed, while there will be parts of the country where some people might want the commission to have acted differently, the consensus will be that the commission has carried out a difficult task effectively, with tact and diplomacy and with the best interests of local government voters throughout Scotland at heart.

Rosyth Dockyard

Ms. Rachel Squire: I begin by offering my thanks and by paying tribute to you, Madam Deputy Speaker, to the other Deputy Speakers and to Madam Speaker for allowing this debate to take place. Last week, Madam Speaker generously granted a debate on Rosyth dockyard but, for reasons of which everyone is aware, it was not possible for it to occur. I know, however, that everyone involved has been working to ensure that it takes place tonight. It is only fair that I should thank all right hon. and hon. Members, and the Whips on both sides of the House, for their assistance in ensuring that the debate takes place. In many ways, tonight could not have been a better time for this debate, as Parliament was lobbied today by workers from all the dockyards involved in defence.
I am here to speak not just for myself or on behalf of my hon. Friend the Member for Dunfermline, East (Mr. Brown); nor am I here to speak only for the work force of Rosyth—for its 4,100 direct employees and its many thousands of indirect employees. No; I am here to speak out for every man, woman and child in Scotland.
Over the years, the industrial giants of Scotland have disappeared. The only one left is Rosyth dockyard, Scotland's largest industrial complex. If the Government do not secure Rosyth's future, we in Scotland will be left with nothing but an industrial history, former employment and bitter memories.
I want to cover three main areas in this speech—employment, industrial strategy, and the strategic, security and cost implications for Rosyth. The people of Scotland fear that the Government will break their promises. Since 1985, Rosyth royal dockyard has been promised that it will be the prime submarine refitting yard. In 1985, a senior member of the Government told us that the yard could look forward with high hopes. We were told that work on the refitting of Trident submarines was guaranteed. He added that the Government would complete the building of the massive facilities required to support Trident submarines, which would be refitted at Rosyth. That Minister is still a member of the Government; indeed, he is now an even more senior member—the right hon. Gentleman is now the Chancellor of the Exchequer. I ask the Minister of State for Defence Procurement whether the Chancellor still holds the views that he expressed in 1985, and I ask him also to give us his own opinion.
I shall talk about the jobs that were guaranteed by the Government, jobs that now seem so insecure. In the dockyard, there are 4,100 direct employees. In Fife, there are certainly another 4,000 to 5,000 indirect employees. It has been estimated in a study produced by the Fraser and Allander Institute and St. Andrew's Economic Services that overall job losses throughout Scotland as a result of the closure of the dockyard, which would take place if it was not awarded the Trident refitting contract could be up to 18,000. Sub-contractors would collapse, as would small businesses, 80 per cent. of which have 50 or fewer employees.
There are 245 companies providing supplies or subcontracted services to the dockyard. A further 250 provide services to the naval base. Throughout Scotland, an additional 835 companies have some sort of business with the dockyard. What future will the Government

promise 1,330 companies in Scotland if the dockyard is closed? What future will the Government promise the naval base, and especially 4,000 naval personnel, if the dockyard closes? What future will they offer 18,000 employees and their families in Scotland if they do not fulfil their promises to Rosyth? Those people are like the 18,000 who comprise the population of Buckhaven, like the 18,000 who live in Balerno and Baberton, which are in the constituency of the Secretary of State for Defence, and like the 18,000 who live in Huntingdon and Godmanchester, in the Prime Minister's constituency. What will happen to those people if the dockyard has no future?
Fife does not have low unemployment; it has the second highest unemployment in Scotland. If the dockyard closes, it will certainly come top of the list. It will have an overall unemployment rate of 17 per cent. In the Dunfermline area, we shall be talking of up to 30 per cent. unemployment—one in every three people out of work.
We are aware of the plight of many young people. At present, Rosyth dockyard still brings some hope—for example, it still trains 65 per cent. of all Scottish engineering apprentices. If it closes, the Government will be telling those apprentices and engineering firms that there is no future for them.
If the yard closes, it will cost the Government a great deal. We reckon that redundancy costs will be about £102 million. Clean-up costs will amount to £2 million and unemployment costs will reach £280 million; that is not to mention writing off the £125 million that has already been spent on the new Trident fitting work. I am suggesting to the Government that they can save more than £500 million. They can save jobs and their own reputation by adopting Babcock Thorn's proposal to have two dockyards with one management.
That proposal is for a dual-site option of submarine refitting at Rosyth and surface ship refitting at Devonport. That option would save the Ministry of Defence more than £260 million and would save the Exchequer an additional £250 million. It would preserve local economies and employment and provide a safe solution for submarine refitting. Babcock Thorn has made a fixed-term bid to the Government of £267 million. It offers Rosyth new equipment and fabric which are designed with low maintenance in mind. It offers facilities and special skills, efficiency and throughput, more jobs and minimal cost to the Exchequer.
It is not just Rosyth's management who are arguing for two dockyards and one management. Just last week Professor Donald MacKay, the chairman of Edinburgh consultancy PIEDA Ltd., said that savings of up to £440 million in defence spending could be made if submarine work was carried out at Rosyth and work on surface ships was carried out at Devonport. He estimated that the two yards could produce cost benefits of between £320 million and £438 million over the next 30 years.
Other worldwide studies demonstrate that the best savings are made by adopting a multi-site focused approach rather than a large-scale single-site operation. Safety, decommissioning, lay-ups, operational availability and location considerations all favour the dual-site approach, with Rosyth dealing with submarines.
I have just received a report from Price, Waterhouse —hardly a firm of which I would normally speak well. About Rosyth it said:


As a result of our analysis of the projected operational costs to the MOD estimated by BTL under the two options and the sensitivity analysis which we have undertaken on certain material figures and assumptions, we conclude that costs are marginally balanced in favour of a dual site option.
In addition the MOD have a potential opportunity to save approximately £120£140 million by concentrating nuclear submarine refitting and decommissioning at Rosyth. These savings represent the differential cost of Rosyth's ability to accommodate the full nuclear programme earlier than Devonport.
The Rosyth proposals are intrinsically safe. Rosyth is much more remote from the public than Devonport, where 38,000 people live within 2 km of the dockyard. Rosyth is capable of meeting all modern safety standards and its work force have an impeccable track record in submarine refitting and technical expertise. Its safety record on nuclear refitting is second to none.
The site for a new refit facility was chosen not by Babcock Thorn but by the Ministry of Defence after intensive investigation in the early 1980s. The design of the new facilities at Rosyth is at an advanced stage. They will be built on bedrock, which is more secure than any other kind of rock anchor. Rosyth's results have been audited by the nuclear installations inspectorate.
Let me say something about industrial strategy. The Fife economy is very fragile, because of such factors as long-term structural change, peripherality and a lower level of company formation; yet the dockyard has been innovative. It has developed defence diversification up to 15 per cent. of its work load. The most famous example is probably its work on London underground carriages.
None of us is under any illusion: the new era of peace and the peace dividend is in danger of creating an economic desert in parts of the country—particularly in Fife, where 30 per cent. of all businesses are defence related. In Rosyth, 10 per cent. of regional gross domestic product is provided by the dockyard; the dockyard, together with the base, has a turnover of £394 million, the vast majority of which is spent in Fife; and the Scottish economy is further affected by related expenditure of £380 million a year.
Let me ask the Minister some questions which I should particularly like him to answer. When does he believe that Rosyth will be ready to undertake the first Trident refit? When does he believe that Devonport will be ready? What Government savings will result from the closure of Rosyth, given the massive increase in unemployment benefits and the reduction in tax and national insurance receipts? When will a decision be made and announced? Hon. Members want specific dates, rather than further generalities such as "before Christmas" or "early in the new year".
Would Rosyth be given a lifeline, just to delay its closure? Does the Minister see a future for the naval base, which I visited on Monday, if the dockyard closes? Is it true that the Navy Board has come out in favour of Devonport? Why has the Ministry of Defence rejected Babcock Thorn's proposal to take over all nuclear refitting work three years early, in 1994, which would save £150 million? Does the Minister accept that Rosyth could handle the whole operation from 1995? Are the Government in favour of a dual site or a single site? As far as the Minister knows, does the Chancellor still hold the views that he held in 1985, and does the Minister share those views?
Finally, let me ask a question that was given to me to ask tonight:

When the Government privatised the Royal dockyards…it announced that, in addition to securing better value for money, it also wanted to achieve 'scope for expansion of employment opportunities in the regions concerned' and 'an assured long-term future for the Dockyards' … It is clear that the proposal put forward by Babcock Thorn is consistent with these objectives. Can Ministers confirm that these are still aims of Government policy?
Let me be honest: I never thought that I would stand in this Chamber arguing for nuclear submarines that would assist the Government. I am prepared to do so because think that people are most important—the Rosyth work force, their families and the people of Fife and Scotland in general. It does not come easy to me, but I propose that the Government increase their popularity with the people of Fife and Scotland by retaining Scotland's largest industrial complex. I do not need to tell any hon. Member what will happen if Rosyth dockyard closes, nor do I need to tell any hon. Member that this is not just a local campaign or a Fife campaign. It is a campaign throughout Scotland, and possibly even further, by all those who care about the defence of this country.

Mr. Bill Walker: I congratulate the hon. Member for Dunfermline, West (Ms. Squire) on, first, attaining this debate and, secondly, being kind enough to agree—as have my hon. Friends—to my speaking in the debate. I have no hesitation in contributing to debates on defence matters. Many hon. Members know that for many years it has been my job to defend the reasons why we maintain our nuclear capability on the Clyde. I have believed in deterrence for many years, and I still do. We must examine how to maintain the submarines that will be based in the Clyde for the next 30 years.
The Minister will be aware that the Babcock Thorn proposals which he and the Government have received, as well as the modified versions, are financially sound. Babcock Thorn's two-dockyard proposal was not dreamed up simply to save jobs. It is a management proposal made on sound management lines that clearly demonstrates that one can manage two facilities more effectively and efficiently than one.
Another huge and important advantage of having the submarines serviced at Rosyth and the surface ships serviced at Devonport is that the proposals are environmentally sound. A purpose-built, earthquake-proof dry dock facility for nuclear submarines at Rosyth must surely be safer than a modified facility at Devonport. The absence at Rosyth of a high-density population makes it a much better choice. It cannot be wise to put nuclear submarines into a modified facility right in the centre of a large, waterfronted city, particularly when a more suitable, less populated site at Rosyth is available.
Can the Minister confirm that this aspect of the environmental considerations will be fully and adequately addressed before any decision is made? Can he also confirm that the Babcock Thorn single management proposals for both dockyards will be fully and properly examined, again before a decision is taken? Will the independent report that supports these views also be considered?
Furthermore, can the Minister confirm that the real and full cost to the public purse, in the event of that facility being closed, will be made known? I refer to the money already spent at Rosyth as well as to that which has been committed and that will not be recouped. There will also


be the cost of redundancies and the unemployment and social security costs. Will the Minister ensure that the figures submitted by Fife regional council and the Fraser of Allander Institute are part of the package that the Treasury must properly examine before just a military decision is taken? My view, and that of independent experts, is that the cost to the public purse of closing the Rosyth facility would be far in excess of the cost just to the Ministry of Defence.
Can the Minister also confirm that, before any decision on the future of the Rosyth dockyard is made, proper consultations will take place with all those involved? I have particularly in mind the trade unions and the management.
I remind my hon. Friend—the hon. Member for Dumfermline, West drew attention to this—that at present not so many engineering apprentices are being trained as one would wish. In Scotland the number of engineering apprentices is slightly more than 600. When one remembers that more than 300 of those apprentices are trained in the dockyard at Rosyth, one realises that the cost in the training budget would be massive if we had to find alternatives. That is important. Such matters must be taken properly and fully into account before any decisions are made. One should be in no doubt what the economic consequences will be for central Scotland if the dockyard closes. The consequences will be horrendous. One should have no doubt about that at all.
I have no hesitation whatever in standing behind my hon. Friend and saying that I do not need to be persuaded that it is wise to keep Rosyth. I have always believed that Rosyth is one of the great jewels in the crown of defence, and I still believe that. That is why I argued in 1985, and earlier, that we must keep both the dockyard and the naval base. I still believe that the retention of the dockyard and the naval base is an essential military requirement.
It is worth noting the proposal of Babcock Thorn to have submarines serviced at Rosyth. That is sensible because submariners have their homes in central Scotland and the submarines are based on the Clyde. Anyone who has studied such matters knows that submariners spend a lifetime in the service. Many of them buy homes in central Scotland and put down roots there. If submarines are required to be serviced, it makes sense to have them serviced in a convenient place so that submariners do not have to move from home. They can travel daily because Rosyth is as near to where many of them live as the base on the Clyde. That matter must be taken into account. It is equally true that the service fleet is largely based in the south of England. The sailors who man the surplus ships have their homes in the south of England, so it makes sense to have the ships serviced in the south of England. That must be another important matter.
I now turn to yet another important matter. [Interruption.] It is not a matter about which anyone should mutter or be foolish. I refer to one of the most important defence decisions that we will make, probably this century. It is also one of the most strategic and economic decisions that Scotland will face. If we do not retain the facility, the consequences are too horrendous to contemplate.
As the Conservative Member who has been charged with the responsibility of looking after defence matters on behalf of the Conservative party, I ask my hon. Friend to

bear in mind, as the Government will, the fact that there are bound to be political costs which I would hate to contemplate if we considered closing Rosyth. The peace movement has given free reign in Scotland to oppose the location of a nuclear deterrent on the Clyde. The big factor that has undermined from the beginning the peace movement's campaign against nuclear deterrence—the hon. Lady put her finger on it—has been the jobs at Rosyth. The jobs at Rosyth were our deterrent. When I say "we", I refer to those of us who believe in nuclear deterrents. The Rosyth jobs were the trade-off for trade unions supporting the retention of nuclear deterrents on the Clyde.
We must examine the matter carefully, together with all the other political considerations. I would not look foward to appearing on radio and television to defend the retention of the nuclear base if I could not constantly remind people of the massive number of jobs that generated from the maintenance of submarines at Rosyth.

Mr. Menzies Campbell: I am grateful for the opportunity to say a few sentences in support of the hon. Member for Dunfermline, West (Ms. Squire), who introduced the debate with great skill and considerable conviction. One should acknowledge her persistence in ensuring that the debate took place.
It would also be wrong of me not to congratulate the hon. Member for Tayside, North (Mr. Walker). It appears that he is impervious to change. Prime Ministers come and go and reshuffles take place, one after the other, but still he ploughs an occasionally solitary furrow as the guardian of the defence interests of the Scottish Conservative and Unionist Association in Scotland. That is a rare achievement and, even on a serious occasion such as this, one should perhaps acknowledge it.
My interest in the debate stems partly from the fact that my constituency lies within Fife. Although the economic consequences of the closure of Rosyth might not affect north-east Fife with quite the same severity as it would undoubtedly affect the constituency of the hon. Member for Dunfermline, West, any substantial reduction in economic activity that would occur as a result of closure would have a significant effect on the economy of Fife as a whole and, indeed, on the economy of central Scotland.
The military justification for the retention of the dockyard is overwhelming. Before I deal with that, I should like to note that, if the dockyard closed, the military arguments for retaining the base would be less strong than at present. It is not unreasonable to assume that if the dockyard closed, in due course the base would also go. The economic and employment consequences would be extremely severe.
It cannot be right from a military or security point of view to put all one's ship repairing resources and facilities in one location. I ask the House to think about it in terms of something as simple as sabotage. Let us suppose that all the facilities were located on the south coast of England. The technology of ballistic missiles is now so advanced that some countries in the middle east have the ability to put ballistic missiles into western Europe and the mainland of the United Kingdom. That may seem improbable, but only a couple of years ago we were engaged in a conflict


with someone who would have had no compunction, if he had had the capacity to do it, about firing ballistic missiles at the mainland of the United Kingdom.
If perchance or even by design such a missile landed on the sole ship repairing facility, the damage to the ability of the United Kingdom to conduct its defence affairs could be substantial. It cannot make sense for the moment to concentrate all our facilities in one location. If the proper defence of the United Kingdom is to be achieved, it is inevitable that there must be two separate locations.
I have no discomfort in arguing for Trident submarines to be refitted at Rosyth, because I believe in the independent nuclear deterrent. I believe in a four-boat Trident fleet. The more boats in the fleet, the better opportunities there will be for refitting. The Minister should also bear it in mind that it would be a strange irony if the economic advantage to be derived from refitting nuclear submarines at Rosyth was taken away while the facilities at Rosyth were used for the storage of decommissioned nuclear-powered submarines for which no final resting place has yet been found.
For the reasons that I have given and in view of the powerful arguments made by the hon. Member for Dunfermline, West, I support the proposal that surface fleet work should be located at Devonport and the refit of nuclear submarines should be sent to Rosyth, where the facilities are available and the skills and the capacity of the work force are well proven.

Mr. Phil Gallie: I, too, compliment the hon. Member for Dunfermline, West (Ms. Squire) on her speech about Rosyth dockyard. I am grateful to her for allowing me and my hon. Friend the Minister to participate in the debate. I was an apprentice at Rosyth dockyard. My home town was Dunfermline. The hon. Lady commented on the value of those apprenticeships to young people nowadays, and I endorse every word that she said on that subject.
Rosyth dockyard has played an important role in Britain's defences over many years, especially during the past 50 years, and I believe that it still has an important role to play in the future. During the Falklands war, it certainly rose to the occasion. Throughout the past 20 or 30 years, Rosyth has played a vital role in maintaining the Polaris fleet, which has been right at the centre of British defence policies. Trident is at the centre of those policies for the future, and the nuclear deterrent has operated from Scotland over the years, as it will in the future. It is right to expect that the nuclear deterrent fleet, which has been maintained so well at Rosyth, will continue to be maintained there.
Since Babcock Thorn took over, Rosyth has changed considerably from the dockyard I knew. It has won more than 40 per cent. more work than others through competitive tenders—a remarkable achievement. Its labour utilisation has improved by about 22 per cent.—that, too, is remarkable. Its cost overruns on Ministry of Defence budgets have been virtually eliminated. That fact must weigh heavily with my hon. Friend the Minister when he considers Rosyth's future.
As the hon. and learned Member for Fife, North-East (Mr. Campbell) said, and for all the reasons that he mentioned, it is important that at least two naval bases be maintained in the United Kingdom.
Rosyth dockyard now has tremendous skill and knowledge within the base, and I ask that that skill and knowledge be put to good use for the future of Britain's defence systems.

The Minister of State for Defence Procurement (Mr. Jonathan Aitken): This has been a useful and timely debate, and I begin by congratulating the hon. Member for Dunfermline, West (Ms. Squire) not only on her good fortune but also on her tenacity in securing it. I pay her a genuine tribute, because for months she has campaigned with commendable vigour on behalf of her constituents through correspondence and by coming to see Ministers —and now by securing this Adjournment debate.
I took especial note of the fact that the hon. Lady, with the leader of Fife regional council and other local authority leaders, and with the hon. Member for Dunfermline, East (Mr. Brown), who is on the Opposition Front Bench tonight, came to see me last week to argue on similar lines and with great force the case that she has made so eloquently tonight.
I have visited both Rosyth and Devonport to see for myself their facilities and plans and their blueprints for the future, and I have been impressed, as it is easy to be, with the efforts and the determination of the management teams and the work forces at both dockyards.
Like all my colleagues in the Government, I am deeply conscious of the great importance of the royal dockyards at Devonport and Rosyth to the economies of their areas. Both employ several thousand people and sustain employment for many thousands more in firms throughout their regions. The companies are also among the largest trainers of apprentices in their areas; and I was glad to hear the personal contribution of my hon. Friend the Member for Ayr (Mr. Gallie), who speaks with the experience of a former apprentice at Rosyth royal dockyard.
We are conscious that when we make our proposals in due course we shall be taking some important decisions, and we recognise the enormous significance for Fife and for Scotland of the issues which have been raised tonight.
However, we must also recognise that the subject generates strong emotions in the other part of the country likely to be affected. As I shall make clear to the House, our future plans for ship refitting and repair will have great and wide implications for the communities both of Devonport and of Rosyth. We have to be very careful how we reach our decision.
At the end of the day, we can be influenced only by hard facts of the kind that we have heard tonight. We are approaching the decision with scrupulous fairness and impartiality. To some extent, I am almost in purdah tonight because we are fairly close to reaching our decision and, as far as Ministers are concerned, this debate must be something of a listening exercise. However, I will answer all the questions asked by the hon. Member for Dunfermline, West.

Ms. Squire: Will the Minister be more specific about the dates involved in reaching a decision and making it public?

Mr. Aitken: I will answer the hon. Lady's question about the dates. However, before I respond to her questions, which I recognise are important, I want to pay tribute to the—

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

Mr. Aitken: Before responding to the questions of the hon. Member for Dunfermline, West, I want to pay a genuine tribute to the work forces at both dockyards who have given long and devoted service to the Crown over many years. Rosyth has carried out all the refits of Britain's Polaris submarines, including that of HMS Renown whose rededication ceremony took place a few days ago. In particular, I pay tribute to both companies which have reacted positively and enthusiastically to a requirement to complete warship refits ahead of time and to convert vessels of the Royal Fleet Auxiliary to war time use in preparation for the Gulf conflict and, before that, the Falklands conflict. The whole country has good reason to be very grateful to all those who work in the royal dockyards.
I want now to respond to some of the specific questions that have been raised in the debate, and I will do so in reverse order. My hon. Friend the Member for Ayr, whose contribution as I said, was very valuable from his perspective as a former apprentice at Rosyth, quite rightly highlighted improvements in productivity and competitiveness at the yard. He praised the great reservoir of skill and knowledge in Rosyth dockyard. I entirely accept his points.
The hon. and learned Member for Fife, North-East (Mr. Campbell) set out eloquently the military and security case for two locations. We are well aware of that. However, I thought that he was a little far-sighted when he envisaged the possibility of missiles raining down on Devonport. I suppose that stranger things have happened in the military world and it was perfectly valid for him to make out his case about the importance of two locations rather than one.
My hon. Friend the Member for Tayside, North (Mr. Walker), who has long been a staunch and vociferous champion of strong military defences of this country—more so than the hon. Member for Dunfermline, West, who acknowledged her recent Damascus-like conversion to Trident submarines—ran through a list of questions. He asked whether we would take into account environmental considerations, and the answer to that is yes; whether we would properly consider the dual-site proposal, and the answer to that is yes; whether we would take into account the recent special reports, particularly that from Fife council, to which the answer is yes; whether we would take into account the money that has already been spent on the RD57 project at Rosyth, to which the answer is also yes; whether we would take not just a military decision but a wider decision, and the answer to that is also yes, we will take all those broader factors into consideration. Finally, he asked whether I would be willing to receive consultations, and the answer to that is also yes.
We do not seem to have done much but receive representations from every possible viewpoint. In addition to representations in respect of this debate, I met a delegation this afternoon from Devonport and, a few minutes before the hon. Member for Dunfermline, West opened her debate, we heard a petition tabled from

Devonport. We are trying to carry out a genuinely even-handed approach. Lack of consultation has not been a problem.
I want now to consider the specific questions of the hon. Member for Dunfermline, West, many of which referred to dates. She wanted to know when Rosyth and Devonport would be ready to undertake the first Trident refit. We are confident that the facilities at either Devonport or Rosyth will be ready in time for the first Trident refit. We estimate that Devonport could take over all nuclear work at approximately the end of 1996 and that Rosyth could do the nuclear work nine months earlier, in the spring of 1996.
The hon. Lady asked what Government savings there would be if Rosyth was closed. Given the unemployment increases that she predicted, I cannot give her a precise figure, but, as I said in answer to a question from her on 27 October, all relevant considerations will be taken into account. The amount of spending that might be necessary on unemployment benefit will be roughly the same in both areas.
The hon. Lady asked me when the decision will be made and announced. It is our firm aspiration and intention to announce our proposals by the end of the year, but I should enter the caveat that, if more time is needed to get those proposals right, we will take it, because it is a decision of some complexity and wide significance. If we need to take a little longer in the interests of checking more carefully, I do not think that the House would begrudge such extra time, but we hope that it will not be necessary.

Mr. Paul Tyler: The Minister will agree that the loyal work force in Devonport and in Rosyth are on tenterhooks on this issue. I should like it to be recognised that at least one west country man is present who has constituents in Devonport. The loyal work force to whom the Minister rightly paid tribute recognise that it is an extremely important decision and that it must not be rushed, but it has gone on for a very long time and patience is wearing thin.

Mr. Aitken: There is no question of any kicking for touch or unreasonable delays on the part of the Government. As I have said, it is our firm aspiration and intention to reach a decision and to publish our proposals before the end of the year. I entered the caveat because more information is still coming in and further representations are being made. Only this afternoon, I saw people from, I presume, the hon. Gentleman's constituency or from neighbouring constituencies, and it is only fair to make sure that everyone has his say. I accept that we have already tarried some time in reaching this stage in our considerations.
The hon. Member for Dunfermline, West asked whether there would be a future for the naval base if the dockyard closed. That is a hypothetical question. The decision that we have to take is primarily about the future location of nuclear refitting work. Of course we will take into account the implications for all other installations at Devonport and Rosyth, but those are not directly germane to the issue.
I was asked about reports from the Navy Board. I cannot comment on advice that the board might or might not have given in confidence to Ministers, particularly as that advice is still continuing. We receive advice from a variety of sources, and some of it is still in progress. I was asked by the hon. Lady why the Ministry of Defence had


rejected Babcock Thorn's proposal to take over all nuclear refitting work three years early in 1994 and to save, allegedly, £150 million. We have neither accepted nor rejected any proposal, although we had reservations about a timetable from Babcock because it would have involved deferring the refit of one SSN.
The hon. Lady asked whether I accepted that Rosyth could handle the whole operation from 1994. We accept that Rosyth would have the facilities available from the end of 1994 to handle all nuclear refitting work, but a key factor would be the nuclear programme of the other yard which might be continuing for some time.
I have done my best to answer those broad questions. I hope that I have not left out anything. However, let me say a word about the reasons for and the conduct of the review, because the crux of the matter is our review of future refitting strategy. My right hon. Friend the Member for Bridgwater (Mr. King), the former Secretary of State for Defence, made it clear in his original statement on "Options for Change" in July 1990 and in his statement on fleet support in July last year that there has been a fundamental change in the level of readiness, infrastructure and support that we now need to defend this country and our overseas interests.
Against that background it would be irresponsible if the Government failed to give the most careful consideration to whether the investment that we make in defence is giving good value for money to the taxpayer. That applies as much to the support area as to the front line, and we have, as the House knows, engaged in a thoroughgoing assessment of our future needs in the fleet support area, including the dockyards.
A particular factor has been the consideration of the future size of our nuclear submarine fleet, which now comprises 13 hunter-killer submarines besides the four ballistic submarines, which carry Britain's independent nuclear deterrent.
Our original intention was, as the House knows, that Trident submarines should be refitted at Rosyth. The hon. Lady reminded the House of statements made by Ministers some years ago, but they were made when our submarine force levels were rather higher, and there was no doubt that two refitting facilities would be required.
However, studies done in my Department, on the basis of proposals by each of the existing dockyard contractors, have shown that it would be feasible and cost-effective to concentrate nuclear refit work at one dockyard.

Mr. Gallie: Does my hon. Friend concede that, if Rosyth were selected, its experience and knowledge are sufficient to maintain the fleet without the movement of resources from elsewhere, but if Devonport were selected expertise and knowledge would have to be moved there from Rosyth to maintain the Trident submarines?

Mr. Aitken: That is a fair point, but it is debatable. Others might make out a different case. We listened

carefully to all those points of view and are considering whether to have two sites or one and whether there will be only one nuclear refitting site.
We have reached the point when we must consider the best way forward in the light of all the evidence that has been given to us. That evidence has covered a broad range of issues, including military, financial and other factors, and we want to get the process right.
The hon. Lady referred—as she would, given her constituency—to the proposal that we received recently from BTL. We recently received further proposals from both dockyard contractors and the parent company of the management contractor at Rosyth, Babcock International Ltd., has proposed that it should manage both dockyards, with nuclear refitting concentrated at Rosyth. That is known as the dual-site approach. We have had a similar proposal from Devonport Management Ltd., but it would be wrong for me to discuss the details of the proposals made by Babcock or Devonport because they contain so much commercially confidential information.
Both proposals are extremely constructive. I am grateful to the hon. Lady for drawing my attention to the Price, Waterhouse report, which she introduced as though it were a rather ill-smelling piece of fish, even though it seemed to substantiate her case and its conclusions. I gather that she does not have much love for accountants, even when they serve her cause.
All the documents and reports have been helpful and constructive and have assisted us to find the best way forward. They will be wholly taken into account when we announce our eventual package to the House.
The Government are fully aware of the momentous importance of the decision. As we are discussing Rosyth, we recognise how crucial it is not merely to Rosyth dockyard and its immediate surroundings, but to the people of Scotland and the economy of Fife. That importance is reflected in the good attendance at this late hour.
The impact on the local economy—on jobs and industrial strategy, to which the hon. Lady drew attention —is one among the many factors that we have to consider as we seek to balance the needs of the Navy and the taxpayer against those of south-west England and eastern Scotland, and against the more general needs of the defence of the United Kingdom and the cost-effective use of taxpayers' money and public funds.
As soon as we have proposals, we shall announce them, and we shall then be able to discuss their wider ramifications with hon. Members, local authorities, trade unions and other interested parties. That process will be immensely important in the consultation period in ensuring that we reach the right conclusion in the end.
I am grateful to the hon. Lady for giving me this chance to set out the Government's plans and proposals on this important matter.

Question put and agreed to.

Adjourned accordingly at thirteen minutes past Ten o'clock.